Cameron tells CBI sorting debt 'harder than envisaged'

David Cameron: ''It can still be a nightmare for companies wanting to borrow money''

Getting debt under control is proving harder than anyone envisaged, the prime minister has told the CBI conference.

David Cameron hinted at some solutions to be included in the chancellor's Autumn Statement on 29 November.

He said there would be a "massive credit-easing scheme" to help small and medium-sized businesses borrow money.

The chancellor will unveil measures to deal with youth unemployment and to create links between infrastructure projects and enterprise schemes.

The government also plans measures to simplify employment law.

Elsewhere in his speech to the CBI, Mr Cameron said that the crisis in the eurozone was having a "chilling effect" on the UK's economy, and that the stream of negative news about Europe was affecting confidence.

The government's strategy is to pay down debt and focus on growth, he said.

'Dangerously wrong'

The CBI's annual conference, this year being held at a hotel in London's West End, has made boosting UK exports its centrepiece topic.

The CBI wants Britain to match the EU average of one in four small-to-medium-sized enterprises exporting by 2020.

The prime minister criticised people calling for growth to be stimulated by additional spending funded by borrowing.

On the spot

An executive said at the start of the CBI conference that he was looking for "something to hang onto".

What he meant was that, in these gloomy economic times he was hoping to see signs of optimism. It was a difficult ask, given that this is just a one-day gathering.

Yet, he was in a cheerier mood by late morning.

It wasn't David Cameron's speech that changed his outlook (although he did give it seven-out-of-10), but the fact that he had met like-minded individuals also struggling to see a way out of the mess.

And that is probably the single most important reason business people come to these events. It acts as a comfort blanket - everyone is in this together.

He stressed that the country was "recovering from a debt crisis, not a traditional recession".

"People who argue that traditional fiscal stimulus, extra spending funded by even more borrowing, is the right answer are not just wrong but dangerously wrong."

But Labour leader Ed Miliband said the measures announced were inadequate.

"David Cameron's speech shows he is out of touch with economic reality and does not understand the scale of the economic crisis facing the country," he said.

"These measures are too little, too late from the man who was responsible for choking off growth in the British economy when he came to power."

Housing initiative

Mr Cameron also told the conference: "Everyone agrees now that in the past Britain's economy had become lopsided: too dependent on debt, on consumption, on financial services.

"If we are to build a new model of growth, we need to give a massive boost to enterprise, entrepreneurship and business creation.

"Put simply Britain must become one of the best places to do business on the planet."

David Cameron and the Deputy Prime Minister Nick Clegg, who is also at the conference, have also unveiled a government initiative on housing: a £400m fund to boost housebuilding.

They promised to break the "current cycle in which lenders won't lend, builders can't build and buyers can't buy".

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