LONDON, May 17 (Reuters) - British Prime Minister David Cameron on Tuesday faced questions on the economy and Britain's overseas military operations from parliament's influential Liaison Committee.
Below are highlights from the session.
ON AFGHANISTAN
"This year there will be some troops coming home -- this is not a new announcement in any way -- our enduring force level remains at 9,500. But as you know, our force level has been above that if you include special forces and some of the extra operations we have undertaken.
"If you look at things like what is happening with the troops that went in to guard the airport at Kandahar and also some people involved in the air bridge and some people involved in the rapid reaction force -- there will be around 400, slightly more, troops coming out of Afghanistan in the coming year up to February 2012. But the enduring force level remains at 9,500."
ON SYRIA
"What is happening in Syria is unacceptable. The amount of people who have been killed by the regime is appalling.
"If you believe the figures from Human Rights Watch, and there is no reason not to, there has been an appalling level of regime intimidation and killing.
"We should condemn it in the strongest way, which we have, we should also take steps, which we have, in terms of sanctions and asset freezes and arms embargoes.
"But there is a difference between Libya and Syria. One of those differences is that in the case of Libya we were invited to do what we are doing by the Arab League, and there was strong local and regional support. I don't think we can say that about Syria."
ON PROJECT MERLIN, BANK TAXES "The other side of Project Merlin was that we will not introduce further bank levies, taxes, bonus taxes and all the rest of it as long as this lending is forthcoming.
"That is the point of Project Merlin so if they don't fulfill their side of the deal then clearly the government wouldn't have to fulfill its side of the deal."
ON BANK LENDING
"Obviously, the recent figures are disappointing but they only go as I understand it up to March and of course the agreement that we reached with the banks, project Merlin, which was all about increasing bank lending, really runs from the whole of this year. I think we should judge this across the year rather than any one given month."
ON ECONOMY, SUPPLY SIDE
"Clearly there is no room for a fiscal stimulus, because effectively we inherited a system with a huge budget deficit.
"Clearly the economy has already had a monetary stimulus, and interest rates are pretty much as low as they could be; and so the tool that is left to government is to do everything you can to the supply side of the economy ... and that is what the growth review that the Chancellor and I have been running is all about."
ON OIL, GAS INDUSTRY
"I think what we are proposing is fair, not least because when this levy was last changed I think the oil price was ${esc.dollar}66 a barrel and it is more like a ${esc.dollar}113 now and, according to Treasury estimates, profits from the oil and gas sector are still going to be a full 50 percent higher in the coming year than they were a couple of years ago.
"So I think it is fair that we definitely accept we need to discuss with them the setting of the trigger price of the fair fuel stabiliser. We should be also looking at the fields allowance issues to make sure that fields are being properly exploited.
"And we do understand the tax relief for decommissioning costs is a very big issue and try and provide some certainty there -- and I know the Chancellor and his ministers are engaging on that."
(Reporting by Matt Falloon, Tim Castle and Adrian Croft)
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