>> mr. speaker, we made a decision in november not to go ahead but to go ahead with a national insurance price. the party that has raise it is a conservative party. it went from 18 percent to 50% and then they raise it >> was a not under a labour government that it was treated? -- that it was created? [unintelligible] does he not recall that governments of all colors have [unintelligible] >> order. >> mr. speaker, i think it is important in this house that people recognize where there is

agreement and where there is not. there is agreement in our membership of nato. there was agreement on what we had to do to end the cold war. there is an agreement that we have to take action in iraq and afghanistan. finance our defense forces more, and there has been agreement that we need to take action in iraq and afghanistan. and i got to say for the conservatism to reduce big issues to medical, shows just how juvenile their behavior in this house is. >> norm becker. smack it is unfair on real passengers for carbon reduction, the cost of motoring has decreased by 14% while the cost of real first have gone up in real terms by 13%. given the large reason for this is the government's policy of forcing of inflation every single year. can he now get a house in the country give an assurance, if the government is reluctant to in this rbi plus one policy and then their train as go to?

>> mr. speaker, the railways are carrying more passengers and more frank than ever since the second world war. and will be announcing plans to mark to expand our railways and to make sure we have the most modern railways for the future. and i believe the passengers welcome the fact that not only have we better trained services but trains arrive on time. i think it's important to recognize the huge investment that this government has made in the railways of this country. >> is my right honorable friend aware of integers campaign of them undermining of public service and the bbc in particular? as the goes to a general election, will reaffirm that this government supports public service broadcasting and the bbc? >> mr. speaker, what worries me more is the conservative campaign to undermine the bbc and british telecom. and the conservatives have made an announcement that put at risk the future of digitalization and

broadband in this country. we're determined that everyone in this country has access to broa >> we their prime ministers questions. on wednesday, question time will air at 8:00 a.m. eastern live on c-span 2. due to the daylight savings time change. c-span.org that, --at c- span.org, you can find links to previous questions. >> coming up next on c-span is a speech by prime minister gordon brown on the global economy. then it is "q&a" with sharon easton -- with michelis than --

with michelle easton. >> the health care debate moves to the house budget committee on monday as committee members marked up health care legislation we will have live coverage beginning at 3:00 p.m. eastern. the budget meeting as part of an effort to put the matter to a vote by march 18. they said they want the democrats approve the bill under expedited reconciliation procedures. and the rules committee will meet on wednesday to work at the structure for the debate. house speaker nancy pelosi hopes to start the debate on thursday with those possible later in the week. stay tuned to c-span for the latest on the health care debate. visit our health care of. you can read the legislation.

you can join in the conversation yourself on platter. you can also find cost -- on twitter. you can also five cost estimates, committee hearings, markets, and other events. c-span's health care have thhub. >> added thomson reuters event in london, prime minister gordon brown discussed the economy and the plan to cut the deficit in half. one of the key point outline in the budget report is set to be released on march 24. he spoke with reporters on trade relations with the united states. this is about an hour.

>> thank you provided. -- thank you, everybody. this is the twilight zone of a pre-election campaign. i was just telling gordon that he has honored as on so many occasions. he now qualifies for his unsecured be passed. he can slip and on known. -- he can slip in unknown. this morning, the prime minister will speak with you for amount of time he chooses.

then you will have the usual q&a. i will moderate. gordon, the floor is yours -- or, the podium. [applause] >> i will not try to pretend that i was not concerned. i was. it was the biggest economic crisis in the war. we got the sense of emergency. it became a global financial crisis so profound that it

raised fundamental questions, not just about established economic orthodoxies, but the balance between the organizations and institutions. when i first came to parliament, i never imagined that i would have to nationalize the major building society and put up 50 billion pounds of public money to buy up majority control in two of the world's biggest banks. all we need to do -- and then have to agree to a very stringent fiscal stimulus. neither could i have imagined a huge step forward in global economics. china, india, brazil, south africa, and other matching economies with the g-it back

together to fix a global economic system. alistair darling and the work with our international partners for a fighting chance. it was one of the greatest test of character. with hindsight, we see just how close the world came to a complete meltdown. in the space of just over six months, nearly four years of economic growth was wiped out. in 18 months, the world stock market fell by over 50%. but this was not just about numbers. the human costs has been all too real with millions of jobs lost around the world. during the recession, alistair darling and i have made difficult decisions that have tested our results. but we have stuck to them -- our

resolve. but we have stuck to them. i said we would take action to restructure the banks, help small businesses with cash flow, and we did. i said we would take action to reinvigorate the national economy and we have. while we were hit with a great recession, we now know that the world has indeed avoided a great depression. we avoided that depression not by accident, but by design, by learning from the mistakes made in previous recessions. we promised immediate and real help for families and businesses. we did what we said we would do. i know that many have suffered, but unemployment in the united kingdom group for less than predicted.

the number of small businesses is now growing with a number of private-sector enterprises in britain. but we know that domestic action the loan was never went to be enough. the problems were global. the solutions had to be global, too. in the autumn of 2008 and on the eve of the g-20 summit last april, i was all too aware that, unless we act quickly and decisively, we could be hit again by an economic slump from which it would take years to recover. i attended a great many summits, but i have never been so acutely conscious of the eyes of the financial markets, but the whole world anxiously waiting that we could begin to restore confidence. i believe that the measures we agree to that they did indeed make a difference and did market turning point in confidence.

let's be clear today. although the economy is now growing, recovery is still in its early stages. it remains very fragile. there will be many months ahead of conflicting statistics and mixed signals. we have reached a crossroads in our response to the global economic challenge. analysis by the international monetary fund shows that, if we repair and reform the financial system, invest in jobs, and bring down trade barriers, we can return to the world growth rate of 5% per year and do so on a more secure basis. but if we make the wrong decisions, then the imf estimates that growth rate could be 2% a year lower. this could cost the world $6 trillion in output and cost up to two hundred million jobs worldwide. so the progress we have already

made will not relax our villages or results. -- or resulresolve. we know the world has a lot more to do to increase investment and get trade moving and to bring down unemployment. in my view, we are nearly there to repair much of the global financial system. but there is nothing preordained or automatic about the downturn. while we have come through the worst of this dreadful storm, the waters are still choppy. we must be alive to them here in the traces we will make in the coming months are probably just as important and just as urgent for families, jobs, mortgages, and businesses as the choices we made to protect them at the height of the storm. i believe that, around the world, we have to rediscover that sense of urgency and

collective ambition that guided us a year ago. it is our choices and the wisdom and the resolve and judgments we make to bear in making them of -- at both a national and global level that will secure a recovery and in the pants -- and indispensable reforms to safeguard our future. do we wreckage list -- three recklessly put it to reverse the monetary policy of the last two years and risk putting our economy back into recession? or do continue to support the private sector economy until it becomes self sustaining? 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 of the and reliable, in equitable, and of them unethical status quo?

-- and an ethical status quo? do we retrieve lot more into the silos of national market's main with protectionism or do we push forward with more and better will listen? do we let the progress of recovery be overwhelmed by an ideological program to cut the responsibilities of government, regardless of economic circumstances, or do we hold firm to work carefully constructed deficit reduction plan? we will continue to implement a step-by-step basis in recovery. do we undermine our public servants? with arbitrary cuts or protect those from one services and reduce the deficit by taking tough and fair decisions on spending and tax on other parts of our economy? it would strike a balance between supporting the economy

and reducing the recession. there is a contract between the government and the british people that says more than half the debt as it over next four years. we will set out in more detail in the budget how we deliver on our commitment to restore the public finances while protecting the fundamental public services we depend on. our approach is clear. we will not be diverted from them. we have national tax increases that will be fair to protect hospitals, schools, and policing. this will include forcing all government departments to make real and lasting efficiency savings. every single taxpayers penney's will be wisely deployed. part of our tough approach on

spending will be a tough approach to paying in the public sector. last week, i said that the parliamentary salaries would be frozen. we must take in a plea disciplined approach to pay and benefits across all sectors. after the reports of the review by is, we will also frees the days of senior staff in the civil shot, senior staff in the military, and the pay of consultants, the peace, and dentists. all with new controls, we will save money immediately. we will save more than $3 billion pounds. unlike the policies of the 1980's and 1990's were texas for the wealthiest people since i came down as the burden -- where the taxes for the wealthiest people came down, they will take the greatest strain.

it does not make sense to me to count tax credits from millions of middle-class families while offering a state taxes. for the final essential element of our plan to reduce the deficit is to get the economy growing faster. growth rate and drug rings in demand and reduces the weight and cost of unemployment -- growth rate and jobs brings in demand and reduces the weight and cost of unemployment. we have rejected from the outset the laissez-faire approach that would have let the recession take its course.

it is why we are investing now in the industries of the future. in the last three years, we have had trusted to make. whether to leave the status quo as it was with long planning delays and uncertainties for investors were taking on the importance to build for the future and create more flexible planning environment with a new planning commission to make strategic national decisions? our choice is clear and we have already set out the planning from four ports, and it did, and infrastructure in the future. -- set out the planning for ports, investment, and infrastructure in the future. we had a choice to cut back the

student and apprenticeships numbers during the recession or to raise them in preparation for the recovery. in making these important choices, the right the difficult decisions were made to build for the future. we have modernized the port for british exporters by making incentives to further encourage the growth of small businesses, building on the unprecedented increase in the number of entrepreneurs in this country since the 1990's. we have choices and to enhance our relationship with the rest of europe. we will not jeopardize british jobs and british growth by satisfying the reactionary impulse to muscle their cells from europe where 60% of our trade now -- imposed to isolate ourselves from europe where 60% of our trade now lives. i believe in britain's future.

broadband britain can be a world leader. high-speed rail britain, i've written that is capable -- high- speed rail britain, opening up the possibility of social mobility in the postwar era. this belief in britain's future is why we are modernizing the incentives and improving the way we supervise digital enterprise and communications. we are offering $1 billion pounds in incentives and support so that britain can become a will leaving digital economy as quickly as possible. over the last 10 years, we have doubled the budget for science and we are encouraging partnerships between businesses and universities and scientific inventors and creating a $325 million pounds innovation fund even during a recession to exploit the best of our country.

this belief and britain's future -- this belief in britain's future will find new ways to provide [unintelligible] this belief in britain's future is why we will support new frameworks to stimulate new clear and clean energy generation and why we are investing more to become a world leader in a $3 trillion pounds market for low-carb and environmental goods and services. -- for low-car and carbon envirl goods and services. high-speed rail is a symbol of

our visions for britain and the economic growth and prosperity we hope to deliver to our children. these are critical domestic, economic decisions. the new basis of an investor partnership between business and government, designed to secure their recovery and build a strong and sustainable growth, is financed while we continue to cut the deficit by half. we must also ensure that, on a global basis, the recovery is balanced and sustainable. apart from britain stand -- from britain stepping back, we mucst inject a new urgency into the delivery of the international agreements we have been put his opinion. the world will all too easily the fall to all parents. i believe there is now a real risk -- to old patterns.

i believe there is now a real risk. all the global economies will experience a loss with low growth and low employment. we must now make a reality the breakthroughs we agreed to in pittsburgh with of the g-20. it was the first genuine attempt by countries to coordinate and commit to change the national economic policies and to aim for higher and sustainable growth worldwide. as it was said, without such coordination, countries' individual economic forecasts will suffer. together with a reformed imf, the agreement in pittsburgh is the first step for international

economic governance. now is the time to turn the blueprint into concrete action. europe has already been looking at how as a union it can work on this. countries grapple with how best to have grease regain its market confidence. our duty falls to realize the its burger court, reducing and balances to sustainable levels, -- the pittsburgh accord, reducing the balances to sustainable levels. this framework would be one of three acid tests for international economic cooperation in 2010. the second is financial regulation. the foundation of the new global banking system must be a consistent economic regime.

of course, a timetable for implementation of such rules must be carefully calculated and calibrated to the face of a recovery -- to the pace of recovery. make no mistake. over the coming years, we will need to introduce, gradually add taking into the account -- taking into account the needs of the real economy, much more and higher quality capital. this will do more than anything else to prevent a new crisis. the process up recapitalization must be finished. -- the process of recapitalization must be finished.

i want britain to have the highest standard of supervision in the world, one that is able to compete on a level playing field against other financial centers. we must never forgets that it was the taxpayer that prevented the collapse of the banking system. we will ensure that the taxpayer recoups it. of course, we cannot act in a vacuum. the costs have been and will be different country to country. the approach with up will also defer. that does not mean we can afford an incoherent approach internationally which risks banks taking a advantage of differences between countries where regulation is that the most lax. britain has always been at the forefront of this debate.

i set out the need for a new relationship between the banks and society. the principles that should govern the process, in order to deliver a more fair balance between risk and reward, since then, number of countries have set out their idea that specific proposals. the imf is continuing its work to report -- to prepare a report by april. we should build on the ideas that have emerged in the large financial sectors and achieve consensus on an approach. first, and levy on banks seemed to be the most practical approach. it should be designed to go with necessary reform. third, any levy should support globalization and avoid double taxation of international banks. the proceeds should be for national governments to use, either to put it aside in a fund

or to reduce public debt. we need to work actively with the g-20 to forge a national consistent approach. now is the time for the g-20 leaders to recommit themselves to the ambitious agenda we have already set and to go further by making clear that we will adopt a shared approach to a range of measures necessary to produce systemic risk and to ensure that the financial sector makes its fair contribution, recognizing the cumulative effect of these measures as well as the insistences between them. the third test for the international community and the g-20 this year is a renewed focus on trade. i believe we must make the opening up of trade one of the key deliverable. a world trade deal is within

reach and worth $170 billion a pound annually. two years ago, we were very close to a deal. but we could not travel the final mile. we will need an even more [unintelligible] all players must engage in the shipping agreement. . we are a turning point for our

domestic comp -- economic recovery where we have to choose 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. 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 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 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. 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 them -- for families and businesses in britain. and because it is right in principle and for our economy, we will work for a prosperity across the world that will fuel prosperity in our own country. i have heard some people that this coming -- say that this coming election will be about policy choices. others say it will be about character. i don't think we can separate the two. it is for other people to judge. i think this is not about telling people what they want to hear but what we need to do. it is about having courage make tough decisions and stick to them without being blown off course even when the going is difficult. what you see with me is what you get. the stakes are high, but we dare

not risk the recovery. our task above all else is to preserve and lift the standards of life of the british people. we are weathering the storm. now was no time to turn back. we will hold to our course and we will complete this mission. we've gotten 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. thank you. >> you know have questions -- we will now have questions.

gordon, sometime in the next few months, the british people decided they want a fourth labou governmentr would you as its leader. if that happens -- the fourth labour government with u.s. its leader. what would you like to be remembered for were smart -- i will see this is the first government of the new global era. we need to think about how britain can succeed in this new global era. in the last two years, we've had to weather a global storm. in the next five years, what we can do is build the growth, jobs, and industries of the future. i have just explained how confident i am in the digital broadband, in the creative industry, and the advanced

manufacturing, and the biotechnology, and the los sector -- low carbon sectors of our economy. we will have a mobile economy, creating more skilled jobs in the future, and create possibilities and mobility for people over time. i think that britain will see as a result of these policies, a briton were all areas are capable of growth, with the financial sector is as important as it has been but we will have a more balanced economy around it. i think you can see that growth coming forward. new jobs, new growth, new industries that britain can specialize in -- we have already got a central economy and we are able to sell to the rest of the world. in china and asia and india, i can see the patterns changing as a result of that, but we are

very well placed and orchestrating an economy with far more global reach them before. and if you look at british industry, the investments is for the result of the future. i see is developing new industries and new jobs. i think it will be a different kind, but it will be more sustainable. >> we're here in the heart of one of the world's great financial centers. this audience is particularly interested in hearing what you want to hear in the -- what you want to do in the future to protect, strengthen, and sustain the competitiveness of britain. >> our leadership in the financial sector is something that is not just a feature of our past but is a feature of our future. we're making -- companies are

making decisions about where they will be located all the time. but the advantages we have are very real indeed. we're at the center with the english language, very strong legal and business services around the financial sector, we're leading in many of the market's, even after the problems of the recession, and i think we set high standards and at the same time avoid a competitive race to the bottom. one of the ways that we have to succeed in new york, london, and paris, is that we cannot allow a race to the bottom based on lowest standards. that is what the banking reforms are trying to do, and also with the stability board is trying to do as well. create a platform of standards which all countries which

follow, in this interconnected world, where you have one standard operating around the world and the firms themselves don't have to deal with a host of regulations. this will benefit the city of london and i am determined in the european negotiations to get the benefits as well. >> we are all human beings. chairman and chief executives make mistakes, as the prime ministers. when you look back with hindsight, what the lessons you have word from the mistakes to have made? >> show me a soldier that has made no mistakes and i will show you know -- a soldier that has won no battles.

you have to look back on the decisions that have been taken and see whether you can do things better in the future. as for financial regulation was concerned, my greatest regret is that i was pushing in 1997 after the asian crisis in particular for a global system of supervision for the interconnectedness of the financial system would be reflected in some form of global cooperation. and we set up the financial stability forum, but we never could get the global cooperation that was necessary. what happened was that you had subprime products given to letting -- aaa ratings in america, coming to europe, being seen by the european regulators. if we had a far better system of

coordinating our approach, i think we would have done better. i think that dynamism of markets is something we must extend, and governments -- we've got to share our cells -- sell our shares and our banks, but that global cooperation is quite fundamental. if you have a globalized economize, a global source of goods, global communications, then you must have the means by which the global community cooperates to deal with problems. if you do not, we will have the problems that you've got. you have trade and protectionism, and you see it and climate change. if you cannot cooperate globally in a world that is global, you will pay a very heavy price in the future. my message is that we have to have the same urgency that we

had a year ago about building the global financial supervision that could only be done it nations cooperate together. the big lesson i think i have learned is that global problems need global solutions. >> you talk about the importance of trade and the concerns about protectionism. we feel the sharpest in the united states. what would you say to the democratic president to help them to intervene in the protectionism that is growing? >> the have the speech in front of you when you give it, but when you speak to congress, they already have the written text of your speech and know when to applaud and not to applaud, when the stand up and it is standing applause. i noticed a great deal of silence when he mentioned the need to avoid protectionism and

to sign a new trade deal. it is the right thing to do. i do think that in the fact -- last few weeks people have started to understand that trade is the engine of growth and it is not pulling its weight. people now see as i said in my speech that while we were close to getting an agreement a few years ago -- basically an argument between india and america about whether india could stop excessive imports when trade was running fast, and it could not reach an agreement on that. i think that problem can be solved and that was the one problem that prevented an accord there. but that we have to look at the mentalities of the trade agreement -- the modalities of the trade agreement. it would be a very important signal to all that we are determined to avoid

protectionism and to growth for. what i have been -- and to move growth all word -- forward. i think we're back on an agenda to get a deal in the next few months. we have to work harder but i think it will be important and i think america will welcome it. >> if you have a question, can i ask you to get a microphone in your hand because this is being recorded. >> i'm the editor of reuters. the currency market has settled a lack of confidence in britain at the moment -- has signaled a lack of confidence you say you want to make tough decisions, -- spending freezes -- and how can you get a key election

document in the weeks to come? >> i'm absolutely determined about it. and now is in law, the deficit reduction plan. i think people are asking us -- make sure that the recovery happens and is secure. and then take the decisions that are necessary without interfering with growth and without interfering in the basic frontline services to get that deficit reduction happening. our four-year deficit reduction plan is based on tax changes, public spending changes, and the growth that will be determined about how the economy can move forward. we expect to move out of this recession and we worry about the level of european growth since our export market is so big to europe. we're taking the tax measures and spending measures that are necessary. today is another signal in key

areas of our determination to do this. we've already announced changes in pensions and cut back a whole range of areas, and we have already said that there will be departments that have budgets cut. there are uncertainties at the moment because unemployment is actually lower than we expected. that is an uncertainty working in our favor. if we spat -- if we set spending for the departments, we would be setting them on figures that are not clear. but this deficit reduction plan is legally binding -- and is very clear. can i say something about our deficits. our debt levels are set lower than the other cheek-seven countries -- g-7, certainly

lower than japan and others. our debt levels will rise along with america and france and germany. it was right for us to use deficit spending to make sure that the economy recovers quickly. but art that is structured so that the average maturity is about 13 years. it is a lot longer maturity than in other countries. we have 50-year bonds that have been taken up. if you look at the pattern of our debt, it is not similar to that of other countries. far longer term and we have been able to finance it on that basis without the same amount of rollover needed by other countries. and because the financing that that is still lower than when we

came to power. even though it has risen, we initially took that down. but we've seen that debt rising due to the recession. we have a plan to deal with that of the next several years. we've got a clearer idea of what we're going to do about that. >> the gentleman here. >> sam hill. is maintaining that aaa credit rating for the u.k. government crucial to your government in the future? >> i believe that we will maintain that aaa credit rating. i don't think it helps to give running commentary on these things. neither on their rumors and the forecasts that come about one

debt rating agencies. i believe that we are taking the most ambitious measures to reduce that deficit of any of the g-7 countries. if you look at our deficit reduction plan, it is more radical than that deficit reduction plans of other countries. i also believe that people can see that we are going for growth in this economy as well. we can grow out of this recession. in the 1980's and 1990's, it was 50% interest rates, 10% interest rate for four years, high inflation that they could not cope with. that is not a problem at this moment. we can grow our way of this recession. the oilers the gentleman here. -- >> the gentleman here.

i tend to be looking here. >> you talk about the deficit reduction plan. you talk optimistically about unemployment not being as low as you thought. the bonus tax that you have imposed on some people in this room will bring in more money than you thought. given the concern of the markets and the deficit reduction plan, can you give assurance that any extra revenue will go to deficit reduction and not go on to extra spending on the giveaways that some people might like to see you offer? >> i think it should be absolutely clear that we will stick to that deficit reduction plan. it is a four-year plan to more than halve the deficit and it is our intention to see it through

in the way that we have set out. yes, there are uncertainties in different areas. we don't know what interest rates are likely to be at certain points and we do not know what unemployment levels are likely to be. we have been successful at keeping that low. we do not know how this will fare in the next several months. but i can give absolute assurance that we will stick to our four-year deficit reduction plan. and i have a good track record in doing what i say. i said that would freeze public spending until we were in a position to see how the economy was moving forward, and in the last spending round, we cut more than seven departments when i was chancellor. the tough decisions have got to be made but i would say to you all that we're not going to withdraw stimulus until the recovery is assured. we're not going to the mag -- make the mistake of the 1930's

when people are recovery was a short and withdrew that stimulus or whatever they had to keep the economy moving forward and things got worse. we know that there are difficulties in different parts of the world. there is a great deal of uncertainty and we need to make sure that we secure the recovery. we will secure recovery and then we will make sure that deficit reduction plan takes place in the way that we have stated. >> the hand back there, a sort of pressure. -- gray shirt. >> i'm from reuters. at what stage can you tell the british people that they will seek real cuts in public spending that they will feel, even if you can save frontline services?

>> i think what people see most visibly and public services, because of a long history we have had in supporting health care, that the front line health care services are maintained and improved. we've got a program for securing guarantees to people, cash payments if they are not able to get that care for cancer care or getting operations within 18 weeks come on weekends and evenings for free health -- we're not calling to cut the school services at this time because we believe that raising the standards of schools is absolutely crucial. there are very few young people that cannot afford to leave school without a skill. we have to make sure that when people leave education, they have something that they can

build upon. education has been raised 18%, and that is full time education, so they will have the skills that are vital for the future. in other areas, we will make strong efficiency savings. we're prepared to cut other department budgets to maintain our priorities in these areas. i think we have already announced reforms in the way that central government works and dealing with public sectors and pensions, and you'll see more announcements in the next few weeks. we will reform government to deal with the problems. you will see substantial changes in the way we organize government in the future as well. >> the lady in the back. >> wide you think that the weak pound is failing to reduce exports?

-- produce exports? >> i think it is obvious what is happening. european economy, our major source of growth, is not growing fast enough. if you have 60% of exports going to the european markets, and you have even with some benefits from the currency of very sluggish growth rate in these areas, it's easy to say. we wish to expand exports to china. we're working closely with india. india wants to build 1000 universities of the next few years and we can be part of that amazing program of education expansion. but the fact is that we've got to get the world talking together about how each continent and contributed -- can contribute to the growth. there are issues of trade imbalances and reserves by

different countries -- all of these are holding back the growth that we need to see in the world economy. i think that is the worry that i have at the moment. i think we will get -- we could get insufficient growth in the rest of the world. >> right here. >> you mentioned in your speech that policy and character went together. and that they would both be part of the electoral campaign. your character has been in focus for the last few months. what gives you confidence that you can win the battle of character with david cameron? >> it is not for me to judge the final outcome of this, but the british people. [laughter] but i look for to put our achievements to the british people.

for the last two years, we've been living and the world of referendum -- and the world of referendum, were you criticize the government for this are not doing that. now we're in the world of choice. people have to make up their mind -- do they want to put the country at risk or not? do they want to have a party that has had 10 different position and keeps changing its mind? do they want to do best to secure the growth and industry of the future? i don't see an industrial policy coming from the conservative or from the liberal party. do we want to play our part in europe or do we want to withdraw and be on the fringes again, have a battle about things that are long gone as issues in the european union, simply reopened for the sake of ideology? when i say the policy and

character code to weather -- together, is about what you have a clearer idea about what you want to do, what you are determined to push that through, and whether you are sufficiently patient and strong will to push aside the barriers that stand in your way? over these last two years, we have pushed the world into a position from britain where we have a better outcome then we could reasonably have expected from the events that were catastrophic two years ago. now we have a different task and it is urgent -- to maintain the recovery and secure it, but also build the jobs in industries of the future, and i think i have a clear idea what we need to do. in the end, it will be put the british people to decide and that is why i welcome the chance to do that in the next few months. >> only time for two or three more questions, so the gentleman there. >> russell lynch. could you rule out any rises a

vat? >> we had a debate about this and we decided to raise national insurance that pays for some services. we ruled out the vat. the party that is keen on the vat, the conservatives, so perhaps your question should be directed to them. >> niall. >> prime minister, what would you say is your greatest policy ever since 1997. >> i would say what i said earlier. the grid is policy error was not to push forward with global cooperation at the time when the haitian crisis had revealed the necessity. we tried to persuade the americans, we sent proposals around the world, we created financial stability for them, but it was not strong enough for

good enough. if you are looking at economic policy over the last 12 years, it is clouded by the fact to have a global economy, global flows of capital, global sources of goods, global communications, into related, interconnected, and tangled banking systems that come right across the world, but you do not have progress that you should of had in global supervision. this is the lesson we learned on climate change and a lesson on nuclear weapons, a lesson we are learning on terrorism, in every single area affecting economic and environmental and security activities. the pace at which globalization has happened has not been matched by the pace at which we to mind -- devise means by which we can cooperate and deal with the consequences of the globalization that we say. yes, i could look at domestic errors in the things that i have

done wrong, but as a whole, what has disappointed me is that we were unable to put the cooperation on all these major issues, and that means institutional changes. we finally got a 80-20 to deal with that, but that was a real push last year. -- 80-20 -- g-20 to do with that, that was a real push last year. it need not be a zero sum game. that is the lesson learned of these last 12 years. i think the world will have to relearn these lessons in trade, and security discussions, in nuclear weapons discussions, and clearly also in the economic regulation of the global economy. >> one last question, the lady in the back. the lady in the fetching purple.

>> you've announced that date of the budget today, six weeks before an election. will it be a budget giveaway because you do not have the money to do that? >> is the chancellor announcing that they did the budget. we are also announcing today what we're doing on public sector pay. you can see the announcements are in line with a very tough deficit reduction plan to freeze the pay of senior civil servants and doctors, general practitioners, and others. all these things are being done. but that deficit reduction plan that is concrete to halve the deficit over four years, but we also want to grow jobs for the british economy. we have the means and our economy, the strength and low carbon industry and digital

industries, the strength and biotechnology and all the creative energies, for us to -- created industries, to lead the world into the industry sectors in the future. and this is the first part of the global age were british can lead and create jobs for the british people in the future. >> one last question for me, if i may. t see sufficient common ground between you and the liberal democrats for you to wish to ask for their support? >> you can ask all of these questions for -- and a few months. i think every party is going to have to win this election. thank you for asking difficult questions. you would expect me to say and it is right to say that this is a fight about our principles and our policies, and we're fighting to win. >> thank you, prime minister. i am sure it will be an

exciting and a ventilation campaign. and we're looking forward to it be over, as you do, no doubt. [laughter] >> thank you very much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> a look now at possible congressional regulation. this is from "washington journal," about 25 minutes. you had a story earlier this week talking about overall financial efforts to oversee financial services and to change that. but particularly when it came to something called -- certain, i guess, lenders that weren't covered by the bill. who are those lenders? guest: in america we have sort two of kinds of lenders, a regulated system of banks and then an unregulated system of company that make loans that look like banks but aren't banks. payday lenders, consumer finance companies, auto dealers that make loans on their lots. and the question before congress right now is how those nonbank

lenders should be regulated. that's the judge of associations -- negotiations right now between democrats and republicans who had tendively reached a compromise he -- tentatively reached a compromise earlier there week. that deal is now back on the table it remains to be seen what happens but that's the issue. host: assuming they'll know at least about the car portion of that, what about the payday lender? guest: it's a model where you make short-term, relatively small loans, and people who need money. so you might need as little as $300. you might charge them $45 for the privilege. that's a very high interest rate if you think about it. the loan probably rolls over every two weeks. so you're paying a lot of money for the privilege of having that money for a very short period of time. it's popular with people who need the cash. but it's been controversial for years because of how expensive it is.

host: from some research we pulled together it said that there were about 500 of these type of lenders in the 1990's. according to estimates, about 22,000 or so today. the average loan that they smaik about $300 to $400 -- that they make is about $300 to $400. it could raifng from 206 to 520%. from those numbers and what you told us, what can you add to that as far as why congress would be interested in seeing how this process works? guest: again, broadly what we have is a situation where we have for a long time regulated the loans banks make. we imposed conditions. we require certain disclosures, certain treatments of cussments. an-- of customers. the government has examiners who go around the country making sure that banks are following those rules. in theory, the same rules apply to payday lenders but there's no one making sure that those rules are followed. in concern, both with respect to

payday lenders and other types of non-bank lenders who do a growing volume of loans in america that have become increasingly popular is that no one is watching them. no one is making sure that they are treating customers fairly. and the proposal has been that the government, the federal government, should expand its regulatory portfolio to include oversight of those kinds of companies. host: does it face any state regulation at all for those type of lenders? guest: they do. it depends on the state, but the states are free to regulate them. all the states regulate to some extent. some states do so more vigorously some less vigorously. it varies depending on where you live. host: so if i'm a payday lender and see this legislation come downing the pike, would have some type of defense. what would be that defense? guest: there's two options to this plan the government is offering. first is that there are regulations at the state level, laws at the federal level. and payday lenders basically say, listen, we're covered, it's

working. there's sufficient regulation of our industry. the second argument that you get is that the government is proposing essentially a very expensive expansion of the work that it does. the creation of a new bureaucracy, hiring new enforcers to go out in the field and look at these things. there's a question about need. this discussion about expanding financial regulation began with the financial crisis. it's pretty clear the payday lenders did not play a role in the financial crisis, neither did used car dealers, neither did consumer finance companies directly. there's a question of, you know, why are we fixing things that weren't broken? why are we going after these guys right now? host: who is making the effort to keep these type of lenders -- guest: the lenders themselves have been very active in washington, coming to town to make the case that these are businesses, they provide americans with services they want. they've been very effective and voak glal air -- vocal in their

advocacy. there's also concern about the extension of regulation to want to ask, why are we extending regulation? why are we spending more money in this area? what is the purpose of this expansion? there is a natural audience there for the concerns of the industry. host: was city of new york senator corker leading the charge or were there are others? guest: it's not just senator corker. he certainly is one of those republican who's has been concerned about the extension of government oversight to these injuries, has been concerned about the costs and complications. and it's a view that he shares with other republicans. it's a view that is really pretty typical of the republican party. host: our guest is known as the national banking reporter for "the washington post." he is going to be with us until 8:30. we'll take those calls in a

moment. you said this. i want to make sure that i'm right. even though senator dodd says he's going ahead with his own plan, as seen in recent days, this still is under consideration, under what might emerge on monday? guest: it's under consideration. senator dodd's staff is working probably right now, at this moment this early on a saturday to hammer out the details of what they want to propose on monday. basically senator dodd, the democratic chair, the banking committee and is in charge of producing this legislation, the senate, has been negotiating with senator bob corker who you referenced a moment ago, the republican of tennessee. they've been trying to find middle ground. on a lot of points they have found middle ground. they haven't gotten all the way to a deal. dodd has now decided he wants to move forward and get some language out before the committee and to move the discussions basically to a public forum. the question that he now faces, that he's trying to resolve this weekend is to what extent does he preserve the compromises that he has already reached with

corker and to what extent does he revert to the draft that will only have his name on the cover? host: we'll talk about other issues in a moment. our first call is lakewood, new jersey. our democrats' line. gary, good morning. go ahead, please. caller: hey, how are you doing, sir? good morning. i just wanted to just -- ok. host: go ahead, sir. caller: ok. i just wanted to let you know that i'm against this payday lending 100%. i'm an individual in the military it seems like every area that you go to in the military you got them like loan sharks. what they're doing to the average soldier who is here to protect the country, they are charging them so much with this -- under this payday lending that they can't even afford to pay the money back. and then what happens is it gets

out to their commanding officers and a lot of times what happens is these soldiers get reprimanded for it. so it's just a modern day loan-sharking and they should do away with it. understand, just like you have emphasized, in the early 1990's it was 5,000 of them. but now, as far as today, it's over 22,000 of them. so it's not helping the soldiers here trying to protect the united states. they should do away with them all atogether and just let them go to regular banks and stuff where they don't use -- utilize them as a loan shark. host: he brought in the military on this. does he have a point? guest: it's actually a really interesting point. the department of defense which doesn't get involved in this type of issue very often, has actually been on capitol hill advocating on this issue and

saying we think our soldiers are particularly vulnerable at some of these non-bank lenders. it had been focused on used car dealers rather than payday lenders. but there's a lot of good studies showing. if you just drive around the edge of a major military base, you can see concentrations of payday lenders, of car dealers, of pawn brokers. these businesses really do thrive near military bases. the department of defense really is concerned about, you know, their role and the way that they serve soldiers and delegations, you know, predatory lend ago booses in some cases. it's really been pushing very vigorously for this legislation, taking an unusually active role. host: minneapolis is next. richard on our republican line. go ahead, please. caller: good morning. yes, i'd like to know what happened to usery laws. i don't know. do you have any history a state-by-state getting rid of the usery law? i think the credit card companies are responsible for

this, too. and also, the city of minneapolis. they charge 50% interest on a late license and then they charge about 1,000% on administrative fines. they're guilty of usery, too. how about the usery laws? guest: it's a great question. the answer is that in the early 1980's the supreme court ruled that a bank operating in one state could operate under the interest rules -- the interest rate rules in that state and every other state in the union. and a number of states, most prominently delaware and south dakota, took advantage of that supreme court ruling to pass laws that said, basically, charge whatever interest rates you want to, come here, set up your business in delaware, set up your business in south dakota, and we'll leave you alone. and that was basically the end of usery laws. because it meant that, you know, whatever your state wanted to yoim pose, whatever -- impose, whatever protections your state

wanted to have -- if you look at your credit card statement, you'll probably find it is based in south dakota or delaware or a handful of other places could now charge whatever interest rates it wanted to. there has not been for a will he long time any significant effort at the federal level to improse interest rate caps. that, in theory, could still happen. but the ability of states to do it has been fundamentally undermined. host: because of the legislation. turning to the cars and people wh host: how would this up that someone like a car dealer making alone on site? guest: when they are providing the financing, should they be regulated as a bank or something different? car dealers are very aggressively lobbying to be

excluded from this law. they say this would constrain their ability to sell cars, be an inconvenience to customers. and houses are a passed its version of financial reform legislation. the car dealers want an exclusion from the house version of the bill. host: the next call is from michigan, from mark on the independent line. caller: good morning. i have a question -- the first question would be, isn't it true that the regulation started after the nixon administration on the federal level, that started this whole down slide? and the situation where banks have been basically undermining

-- like the second caller said, the user real loss. guest: that's so little bit earlier than least part that data significant deregulation. that -- that is a little bit earlier than we start the date of significant deregulation. in washington that we needed less financial regulation that it was better to allow the markets to operate freely to allow buyers and sellers to make their own decisions. really, you know, over the last three decades we saw that trend in full swing. host: we have someone off of twitter saying that in theory, if the government created this payday loans by making it harder to get legitimate bank accounts. any truth to that? guest: i don't know what the reference is to specifically. it's certainly true that banks tend to serve the middle

classes. that's always been a problem. how do you provide financial services to lower income families to family that are more transient, which is what happens with military families, to people without stable incomes, you know, without stable places of residences. it's a long-standing problem. it's not so much that the government has created it but that the government has never quite found a way to fix it. but you do end up with a situation where other types of lenders have been more successful in serving those communities than banks have. host: if there's language in the legislation that does offer oversight who would be managing the oversight? guest: so this is one of the major controversies. new regulator, a con p assumer pro -- consumer protection regulator solely protecting consumers, borrowers in particular, from abuse by lenders. that entity would have the power to write rules that would apply to all lenders. and those rules would be enforced differently depending on what kind of lender we were

talking about. so in the case of banks, the current proposal is that existing banking regulators would continue to enforce the rules. mortgage companies would be examined by this new regulator. nonbank lenders, it's not clear who would examine them. this is the controversy. it's possible that they would remain solely under state oversight. there are democrats who would like to place them under the oversight of this new agency. that's exactly what they're talking about. host: and the agency would be a stand-alone or in another area? guest: this, too, is controversial. we have a lot more questions than answers on financial reform. but the proposal that senators dodd and corker who, again, i believe are negotiators on this issue, have agreed on tentatively to place it inside the federal reserve. democrats, many liberal democrats, strongly oppose this idea. they would like it to be a free-standing agency. as a second choice, they'd like it to sit in the treasury department. republicans are more supportive of the concept of putting it in the federal reserve.

they think it ought to sit inside a banking regulator so that its priorities of consumer protection can be balanced with the priorities of keeping the banking system healthy. . so your reporters want to check

that out, that's another thing. as far as this, i consider this a big theft from the american people. i think that there should be ethics reform in government and that when there is any crime committed there should be oversight. the best thing to disinfection is sunlight and we should get back to basic that is no one should be above the law. so that when any of these scams are perpetrated in wall street or anywhere else, there should be oversight. and i think the feds should be audited. host: put a lot out there. guest: i guess the one thing i would say is there is no one who disagrees in the senate that laws should be followed and that laws need to be enforced the discussion is who should enforce them, to what extent. states should have that responsibility. to what extent the federal government should have it. and within the federal government, what types of

regulatory agencies should be doing that work. host: as far as payday lenders are concerned, are they usually small stand-alone shops? national chain sns guest: it's become quite large and fairly consolidated. there are a number of very large national chains with hundreds and even thousands of branches across the country that do this work. so it's not -- there are mom and pop establishments who do it but there are also big franchises. host: sherman oaks, california. go ahead. john on our republican line. caller: hi thri. i don't have a feeling one way or another whether these things should continue. but there isn't very valid economic reason for them to exist. one of your earlier callers said they should just go to a bank if they outlawed them, people could just go to a bank. that's just not true. the reason they go there in the first place is because they

can't get money from a bank. they're like a lender of last resort. they can't get money from anyone else. so the option is if you take these things tauf street, if you get rid of all the payday lenders, a lot of people will have no place to get a loan. and then what do they do? they're paying a very high price. but the option is they will have noplace to get a loan. guest: i've spent a lot of time talking to customers who use them and other types of nonbank lenders that are often characterized as lenders of last resort, and i would say in general the customers at those establishments are actually a mix of two kinds of people. one the group that you described which is people who can't get money from anywhere else. but also, generally quite sizeable group of people who could at least potentially get money at lower interest rates from another source perhaps on more favorable terms but are not doing so. and they're not doing so for a lot of reasons.

some of them don't trust banks. that's a particular issue in the hispanic community. some of them don't have banks in their neighborhoods or don't have an understanding of how to use the banking system. we get a lot of issues that are not just questions of needing the lenders of last resort. and even if you do need a lender of last resort, it's the only place in the world where you can borrow money is at a payday lender, there's sometimes reason to ask about whether you should be borrowing that money. host: what's the min rum requirement if i wanted to go there and get cash? guest: in general, you need to be able to show income. what they're going to do is take the payment, the cost of the loob out of your next paycheck. but it's very easy to get these loans. host: not even proof of residency. guest: you'll need to show id, that type of basic stuff. host: sherman oaks from john. next up, houston, damon on our independent line. go ahead. caller: good morning, gentlemen.

i am very happy to hear that this issue has come to light in a way that is relevant. i've been tracking what i like to term as predatory lenders for some time now. it used to be that they were just in what i call red line districts, mostly inner city, poor communities, the banks moved out, the predatory lenders moved in. since i've grown, i reached 41 years of age this year, i live out in the suburbs. a very nice community. they moved out since the predatory nature of the recession has come about, and these institutions have moved into areas where traditionally they could not exist because people had the resources. and they seem to operate with no immunity. they just are free to do what

they will. and it does hurt communities. and the communities where they started they haven't gotten any better. in the suburbs, the communities are getting worse. people are losing their homes but yet these institutions still thrive. thank you. guest: two notes about that. the first is that our economic jobs have really changed over the last couple decades. it is increasingly our suburbs where we have the greatest concentrations of poverty so it's perhaps not surprising that some of these types of lenders have moved out tho those areas. but it is also true that they have moved up market as it were, that they serve a broader spectrum of the population than they once did. this is a reflection in large part of the extent to which we've become a nation of borrowers and turned to a growing number of sources of lending to satisfy our demand for munch. host: you have a story today in today's paper taking a look, and you referenced it earlier

about the work being done this week on this bill. one portion when it comes to this separate regulator. i want to read a sentence. it says that 19 current and former members of the feds consumer advisory coun sell advise sent a letter to senator dodd on friday arguing for free-standing agency with a group of advocates and academics saying that the fed had failed to pro tect consumers during the economic boom. who is this council? guest: they're a group convened by the fed. it consists of a number of community advocates, people who work with consumers and communities across the country and a number of bankers engaged in lending. they meet regularly to advise the fed on issues of how the banking industry is doing in its relationship with consumers. you know, during the economic boom, during the housing boom, many members of that committee, many people who sat outside the fed came to federal reserve

officials and said there are abuses occurring. banks are making loans they shouldn't make. mortgages are being made on outrageous terms to people who cannot afford these loans. this is going to go bad. and specifically what they said to the fed is you have the power under federal law to restrict certain types of lending practices to say this is inherently bad. and you're not doing it. you're not exercising that power and you need to. and the fed did not exercise that power until the housing market had crashed. and so during the period when it might have done the most good, the fed sat passively and watched as predatory lending grew as a problem and did not address it. and the question now, and incidently the fed recognizes that this occurred. they have said that they failed to act properly. that's not controversial as a historical characterization. but the question now is, should the fed keep those

responsibilities? the fed basically says, listen, we acknowledge that we failed to do this properly. we are recommitted to this work. we've made reforms, we've put new people in charge. we have placed a greater priority on consumer protection. and we remain the agency with the best resources to do this work. but some people who know the fed very well including alan greenspan, the former chair of the board of governors, including the members of this advisory council, including several other former members have said publicly we don't think the fed is structurally suited to do this. the fed is most familiarly in charge of managing economic growth, it has a considerable responsibility to regulate the health of the financial system. consumer protection is as long finished at best third on that list of priorities. that's not going to change. and that responsibility should

be moved elsewhere. host: to hear the consumer advisory arguing for a free-standing agency. guest: it is striking that these people who have long been part of the process who are in some respect on the inside of that institution are basically saying, you know what? we know this place and we don't >> tomorrow, our roundtable with reporters on the week ahead in congress. joseph henchman discusses the recent trend in states to raise sales taxes to fill budget gaps. and a discussion of the study showing that