Clegg warns that economic situation is deteriorating

 

Nick Clegg: "There are levers we can pull to stimulate growth"

Nick Clegg has issued a warning about the state of the global economy and vowed to do more to boost UK growth.

The deputy prime minister said there was "little margin for error" but denied the government is helpless in the face of the worsening outlook.

In a speech in London, he said 40 major infrastructure projects, such as Crossrail and new broadband networks, are to be given "priority status".

Labour have urged ministers to change course and scale back spending cuts.

But Mr Clegg insisted there would be "no deviation" from the coalition's deficit reduction plan and said Labour's plan would lead to "soaring interest rates and crashing credibility".

'Jobs needed'

Shortly before Mr Clegg's speech to the London School of Economics, figures showed unemployment rose by a further 80,000 to 2.51 million in the three months to the end of July.

The Lib Dem leader said "the country needs jobs and time is no longer on our side".

Severe external pressures, such the eurozone debt crisis, weak US growth and rising oil prices, had led to a "dramatic change" in the international situation in the past six months, he acknowledged.

Ministers were "not blind" to the deterioration in conditions and recognised the "economic context was much worse than before".

"So the reality we face is stark," he said.

"There is now little margin for error. But that does not mean we are helpless. It does not mean we intend to sit on our hands while the economy falters."

Key projects

Hinting at further growth-related announcements in the coming weeks, he said delivering infrastructure projects as quickly as possible was one way of making a difference right now.

Ministers would scrutinise 40 key public works, such as broadband roll out, motorway improvements and upgrading the national grid, to prevent hold-ups and "get the money out the door".

Work on the Crossrail development in London Ministers are to run the rule over 40 key projects to make sure they are progressing properly

Chief Secretary to the Treasury Danny Alexander has spoken to top civil servants in every government department in recent days to ensure all money earmarked for capital spending is being utilised and not stockpiled.

However, Mr Clegg said the emphasis was on preventing "slippage" in the delivery of projects rather than actually bringing forward work.

Mr Clegg stressed: "Our critics say that all this government is capable of is cuts. That, beyond lowering a few business taxes, reducing a bit of red tape, there is little else we are willing or able to do. That is absolutely wrong.

"We can do more, we are doing more, we will do more."

'Faltering'

The BBC News Channel's Chief Political Correspondent Norman Smith said the speech represented the most pessimistic analysis of the economy's prospects by a senior minister for some time and there was clearly a "cold sweat" at the top level of government about the issue.

Start Quote

His speech today merely says ministers will turn up for work and make sure those projects which haven't been cut are delivered on time”

End Quote Angela Eagle Shadow Treasury minister

Labour said a credible growth plan was crucial to bringing down the deficit in the long term and they repeated their calls for a cut in VAT to boost demand and extra support for housebuilding.

"Nick Clegg says that the government is not going to sit on its hands while the economy falters, but that is exactly what he and George Osborne are doing," said Angela Eagle, Shadow Chief Secretary to the Treasury.

"His speech today merely says ministers will turn up for work and make sure those projects which haven't been cut are delivered on time.

"No investment is being brought forward to support jobs and the stalled economy now and the government is simply pressing ahead with cuts and tax rises that go too far and too fast."

UK economic growth slowed to 0.2% between April and July and Chancellor George Osborne is widely expected to downgrade forecasts for 2011 in his autumn statement in November.

During Prime Minister's Questions, David Cameron said the employment data was disappointing but the government had taken a range of steps to help struggling businesses and families.

 

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  • rate this
    +1

    Comment number 157.

    @155.nelsonchurchill

    Nick is this you?

  • rate this
    +4

    Comment number 156.

    This is a mirror image of what is happening in America but on a smaller scale.
    Money needs to be spent on projects that will ultimately bring financial benefit to the country and overcome the country's economic inertia.
    Unless a positive plan is put in place we can look forward to becoming another basket case economy like Greece.
    We need to drive our economy forward not sit and watch it's decline.

  • rate this
    -2

    Comment number 155.

    Government is doing its very best to ensure that our deficit is reduced, and that growth returns to the UK. The Government has always said things would get worse untill they begin to get better. Think how lucky we are to have a fine man to lead us in David Cameron - does anyone want Brown the psychopath back ? or Milliband the 'yes' man . The BBC want the Labour Party back the rest of us say NO!

  • rate this
    +1

    Comment number 154.

    No Captain Birdbrain (#145), I am not a retired coalminer, I am a former council officer, made redundant due to the recent LA cuts. I taught school children about Sustainable issues.
    Oh and maybe one day when you need a policeman or a nurse, you may find that there aren't enough to service your needs,
    Take your head from between your glutimus maximus.

  • rate this
    0

    Comment number 153.

    146.Tom
    "..At least under Labour we had a real plan for growth and it was forthcoming, along with decreasing unemployment. Labour were investing and making real progress.."

    Paid for by 'QE' if you remember - ie 'printing' enough money to fund a year's worth of deficit spending. Now we wonder why inflation has shot up.

  • rate this
    -2

    Comment number 152.

    137. soarerman0264 "Smartignoramus 110: I imagine you would like people to give up rating on here looking at the amount of negatives you get on here.I can only think you must be one of those right wing droogs,you might learn one day,but i somehow doubt it.

    Yeah, so perceptive and such typically limited research! Take a look at Highest Rated, and try again !!!

  • rate this
    +4

    Comment number 151.

    #30 Jason Mead: "in the private sector you get paid more for delivering more"

    Can you explain then why executive pay has risen at 10x the national rate and bonuses by 187% whilst share prices have fallen by more than 20%? It would appear you are therefore only referring to company executives who, unlike the medical profession, often give little to society in general, even their shareholders.....

  • Comment number 150.

    All this user's posts have been removed.Why?

  • rate this
    +3

    Comment number 149.

    Labour may have put a hole below the water line of the economy (thanks largely to helping out the Banks) but this government is intent on scuttling it. I really wonder if we ever learn anything from history, turning the economic clock back to the 1930s will not solve anything it will only make it worse.

  • rate this
    +2

    Comment number 148.

    What should be fed back to Clegg are his own comments before the election on the Tory Cuts. What he said then has now turned out to be true. The initial problem was global but he told labour it was a failure of domestic policy and now claims that domestic policy is OK, it's a world problem.

    He can't have it both ways.

  • rate this
    +27

    Comment number 147.

    In a world where resources of all kinds are dwindling using 'growth' as the answer to our problems is simply unsustainable. The econmists are simply finding yet another way of messing things up for future generations. We need a radical rethink of what we do next.

  • rate this
    +4

    Comment number 146.

    While the recession in 2008 was the apparently the fault of the Labour government, the impending double-dip recession is the fault of a global/euro zone collapse. At least under Labour we had a real plan for growth and it was forthcoming, along with decreasing unemployment. Labour were investing and making real progress. People voted for 'change'. Be careful what you wish for dear electorate.

  • rate this
    0

    Comment number 145.

    99.steve3556

    58 Minutes ago

    Ah, Captain Birdseye could I borrow your rose tinted spectacles
    -------------------
    Nope you can't borrow my clear as day specs as i'm scared you'll break them with your negativity.

    Are you a nurse, policeman, teacher?... Or perhaps just a retired coal miner who still bares a grudge.

    The fact is the govt is making the best of a bad situation

  • rate this
    +1

    Comment number 144.

    140-growth in this country not as good due to world factors not national?
    Think yre mistaken there. They are inexstricably linked. The Coalition is pursuing policies which cannot have the result of any growth. Unfortunately so are a lot of other govts (tho obama seems to have suddenly got the message). Our govt believes everything public is bad-it is plain wrong-ask any business laying off staff.

  • Comment number 143.

    All this user's posts have been removed.Why?

  • rate this
    -1

    Comment number 142.

    125. Total Mass Retain "I suspect your definition of right is .. different to political science and .. excludes 90% of the population. It also fails to recognise that being one side on economic matters may not be the same in, say, social matters."

    My definition of right vs political science is irrelevant.
    We are discussing economics (not social matters) where political leanings are pretty clear.

  • rate this
    +4

    Comment number 141.

    Another load of drivel from the forked tongue of the Cleggster. Is there anyone who doesn't really hope he gets what he deserves? In a recent council bi-election in Bristol the Lib Dems, who previously held the seat, came a disastrous third - even behind the Tories. Thankfully, a similar fate awaits Cleggster and his cronies.

  • rate this
    -11

    Comment number 140.

    The first priority of any responsible government is to put in place measures to reduce the deficit, which they have and are now in the process of implementing. Growth has not been as good as predicted, mostly due to world factors, not national. This is a wise decision, from a responsible government, to accelerate measures that can increase growth that will not affect the deficit plan too much

  • rate this
    +1

    Comment number 139.

    #131: Try getting 3rd Party Insurance on a Nuclear Reactor.

  • rate this
    +4

    Comment number 138.

    124.Haggy
    "This government blamed the Labour party for the mess we are in and denied it was caused by the global economy and reckless bankers... "etc

    Hell, why not blame 'em all - banks & markets for hopeless lending; politicians, consumers & companies for hopeless borrowing. Reckless lenders need reckless borrowers & vice versa, right?
    Besides, what cuts, they've barely started yet.

 

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