David Cameron has finished giving evidence to the Commons liaison committee.
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Summary:
Cameron has hinted at a split with the Liberal Democrats about work on an audit of the EU’s regulations in the UK.
There have been discussions over restrictions on immigration from the eurozone
The prime minister commended the British civil service as one of the best in the world but puts forward the case that there should be reform and that it should be improved.
Cameron talks of the possibility of allowing ministers to appoint civil servants and that it is appropriate provided there are safeguards where candidates are vetted by a panel.
Cameron urged politicians to be “more relaxed” about alliances forming between various European nations.
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Asked if there's an opportunity to define the relationship between ministers and agencies.
“Agencies do have a level of independence so they should be accounting pretty clearly to select committees... you have to have still a level of ministerial accountability.”
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DC says there should be reform of the bonus system in the civil service
“The problem with the current system is it can be too generous... but you could have people working very hard not getting a bonus.”
“It needs to be very properly controlled; what it mustn’t become is an entitlement – that’s not appropriate.”
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DC said the Leveson inquiry uncovered far more detail about the Jeremy Hunt case than Alex Allen ever would.
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DC says that there will be a debate on Thursday.
He says there was a good reason to to review the Jeremy Hunt case because of the Leveson Inquiry.
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DC asked one quick question on the Ministerial code.
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DC talks about allowing civil servants to give evidence to select committees.
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The panel cite Theresa May not resigning after the border control fiasco.
Under ministerial responsibility the minister is held accountable and is expected to resign when something goes wrong in their department.
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DC asked if it's reasonable for ministers to be accountable for everything that happens in their department.
DC says the short answer is yes, but should that be more real where civil servants are accountable.
He doesn't think there should be fundamental change where it's a free for all where it would be unfair on civil servants.
Cameron: “I don’t want to see the fundamental change where ministers are no longer accountable.”
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DC says it's important to have a system based on merit but says that as long as there is an appointments panel to vet appointments and that there isn't anything to fear because the panel would've sifted out the weak candidates or candidates that would be difficult for the government to work with.
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DC asked if he has looked at the advantages and disadvantages of a politicised civil service like in America.
DC says he has looked into the US system and says that the British system has many advantages like continuity of knowledge in advising ministers.
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DC says fundamentally they should stick to the British civil service model but that there need to be changes.
He thinks the changes in the proposed reforms are quite radical but doesn't think ministerial responsibility should change, and that there are several things in the reforms that will help make the service more effective.
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DC argues that civil servants should not dictate policy.
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DC says that the service should look at making appointments and should look around the world at what countries do with their civil service.
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Oliver Letwin and Francis Maude drove the agenda.
DC points out that some talented servants agree that there should be reform.
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DC reiterates the point that the civil service is impartial and is an institution that the country should be proud of. But adds that the service needs reform and needs to be less hierarchical and more efficient.
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The committee now turn their attention to civil service reform.
DC is asked about the genesis of the reforms and whether or not he agrees with criticisms of the reforms.
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"We obviously have contingency plans for all sorts of eventualities... the legal position is that if there are extraordinary stresses and strains, it is possible to take action to restrict migratory flows but obviously we hope that doesn’t happen.
“I would be prepared to do what it takes.”
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Asked if there are discussions on EU citizens coming into the UK in case the Eurozone crisis gets worse.
DC says that they have discussed contingency plans but if there are extraordinary stresses and strains there will be action taken to restrict migration flows and will do whatever he can to keep country safe.
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DC asked how many allies the UK has on safeguards.
"we're not at the stage at this time for another treaty being put in front of us but you have to be ready for anything"
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DC agrees that the that the banks have not been properly regulated in the UK but that these things must be sorted at a national level and not an EU level
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Panel note that no 10 and no. 11’s contact with the banks has been of some interest and ask if DC could provide a list of meetings with bankers.
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Funding for lending scheme is secured lending. DC says it is higher risk lending but in order to take part have to do a deal with the Bbank of England to make it widely available to a number of businesses.
"In order to take part in it, they basically have to do a deal with the Bank of England... as they expand they’re more likely to be looking at riskier prospects "
DC says banks are focused on safer lending rather than marginal cases and that the general feeling is that doing more lending implies lending to slightly riskier prospects.
DC is asked if BoE should encourage more lending. DC says we need to respect the BoE and the way they want to do things but the risk share is for the BoE and Treasury to discuss.
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DC on the Funding for Lending scheme, a Bank of England scheme that encourages banks to lend to small businesses.
"has a long way to go and need to make sure the scheme is going to make a difference and need to encourage banks to do something different."
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Bank lending has been a problem for lots of reasons. DC cites the state or impairment and confidence as a result of the Eurozone.
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The panel now turn their attention to bank lending and the funding for lending scheme.
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“The only way you can always be in a room is be a member of everything.”
Our interest is not being in the single currency so we need to be relaxed about a Europe of different types of memberships.
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DC says it's difficult to say whether or not having several treaties will lead to several referendums or one big referendum.
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Asked on what reactions he gets from other EU countries about renegotiating EU membership. DC says that there is a growing realisation that there are big changes taking place and no one thought there would be another treaty for years
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DC: Our membership in the EU is worth just as much as anyone else’s and we shouldn’t have any compunction in raising issues with vigour.
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"We made a decision not to join the Euro so can't expect to sit around the table everytime the Eurozone countries are discussing that currency.
DC says he always believed you can have a Europe of different memberships and different groupings.
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Briatin has 40% of Europe's financial services industry and is vital for businesses in Britain in Europe, meaning 40% of votes around the table in EU.
DC says that greater Eurozone integration would lead to more caucusing
DC: I'm only doing my job in protecting the British national interest
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"There's a lot of work to be done before we get to any convention"
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The panel point out to Churchill's statement "We should be associated and not absorbed". DC asked if that's also in line with his thoughts.
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DC says he would like some powers returned from the EU.
If the eurozone countries create a banking union, and if the UK can get proper safeguards, that would not amount to significant change for Britain.
DC: We’ve made our decision not joining the single currency because we didn’t want to give up that sovereignty, but for those outside the Eurozone that is their decision.
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DC is careful to distinguish between the status quo for us and for the EU.
He adds that the Conservative Party manifesto said that the balance of power in Europe isn’t right and there needs some rebalancing for member states.
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DC says the status quo is not acceptable and that it's not sustainable.
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