David Cameron: We will hold firm on economy

 

David Cameron: "It's as if they think there's some magic money tree. Let me tell you a plain truth, there isn't"

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Changing course on the economy would plunge the UK "back into the abyss", David Cameron has said.

The warning followed suggestions by Business Secretary Vince Cable that the government should consider borrowing more to kick-start economic growth.

But, in a speech in West Yorkshire, Mr Cameron echoed Mrs Thatcher by saying "there is no alternative" to "sticking to the plan" on the economy.

Labour said the government's economic strategy had "totally failed".

Mr Cameron said: "There are some people who think we don't have to take all these tough decisions to deal with our debts. They say that our focus on deficit reduction is damaging growth, and what we need to do is to spend more and borrow more.

"It's as if they think there's some magic money tree. Well let me tell you a plain truth: there isn't."

'Into the abyss'

More borrowing would jeopardise the prospect of "good jobs for our children", and the UK's ability to afford "good public services", he argued.

The PM continued: "I know some people think it is somehow stubborn to stick to a plan.

"That somehow this is just about making numbers add up without a proper care for what it means for people affected by the changes we make.

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She's back. She's been brought out of retirement by David Cameron. She is TINA - "There Is No Alternative" - the phrase forever associated with Mrs Thatcher in the 1980s.”

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"As far as I'm concerned nothing could be further from the truth. My motives, my beliefs, my passion for sticking to the plan are exactly about doing the right thing to help families and to help businesses up and down the country."

There were now "some signs that we can turn our economy round", he said, citing the reduced deficit, low interest rates, and higher exports to emerging economies like Brazil, Russia, India and China.

"Of course the challenges are huge. And there is, I completely accept, a long way to go," Mr Cameron said, criticising those who "would falter and plunge us back into the abyss".

'Stubbornness'

He concluded: "We are making tough choices about our future. But we are making the right choices. If there was another way, an easier way, I would take it.

"But there is no alternative."

The prime minister said Britain was reaping the rewards of the tough economic course set by the coalition in 2010, and highlighted the creation of one million extra private sector jobs and higher employment rates.

But shadow chancellor Ed Balls said the UK could not afford "two more years of economic failure".

"Families, pensioners and businesses across Britain will wonder what planet David Cameron is on," he said.

Vince Cable: "We need to pursue what I've often called 'Plan A Plus'"

"He claims the economy is getting better and his plan is working, but everyone else knows that the economy is flatlining, living standards are falling and the deficit is rising to pay for the costs of economic failure.

"This defensive speech cannot mask the total failure of this government's economic plan and growing divisions in a cabinet which is now openly debating the need for a change of direction."

Writing in the New Statesman, Lib Dem Business Secretary Vince Cable suggested the government might need to change course on the economy and consider borrowing more.

He said the danger of slow growth may now be greater than the loss of market confidence through increased borrowing and that the "balance of risk" had changed since 2010, when the coalition made deficit reduction central.

But asked about his position by the BBC, Mr Cable said there was nothing wrong with the government's current strategy - commonly called Plan A.

"We need to pursue what I've often called 'Plan A Plus' - that's financial discipline and getting down the deficit, and at the same time pursuing growth. That's what we're doing and what we'll continue to do."

'Magic wand'

The BBC's Political Editor Nick Robinson said Mr Cable's argument was not new but No 10 seemed to have been caught by surprise by the timing of the article, which comes less than two weeks before the Budget and after the economy shrank in the last few months of 2012.

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Most of those economists, like Vince Cable, tend to think it's a matter of judgment whether it would do more good for the economy than harm.”

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Conservative Mayor of London Boris Johnson told the BBC: "I don't want to intrude on the chancellor's pre budget calculations, but it's definitely my view - and I know it's his view too - that you won't go wrong in this current climate by investing.

"There are plenty of people out there who want to invest in London infrastructure, investing in the big projects, and indeed cumulatively investing in them, to deliver jobs and growth - that is the way forward."

Deputy Prime Minister Nick Clegg, ahead of a meeting with Mr Cable on the government's Budget plans, said there was no division in the coalition over the need to support capital spending which he said was crucial to creating jobs and getting "the wheels of the economy moving".

He told LBC 97.3 that he was frustrated by the slow pace of some current projects but there was a risk that if the government borrowed billions of extra money, this could push up interest rates for ordinary families.

"There is no cost-free, risk-free, magic wand solution to it."

 

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  • rate this
    +2

    Comment number 67.

    Labour seem to be disagreeing with what David and George are doing. That's praise enough for me. Don't forget who sailed us to the very edge of the abyss in the first place just like every other labour government before them.

  • rate this
    +2

    Comment number 66.

    "There is no alternative." A line that could only come from someone blinkered or too stupid to understand reality.
    With less money for most, fewer houses per capita, less access to health and legal services amongst other things it looks as if Cameron has at least chosen a legacy that he can make happen - the man who erased the 20th century's advances.

  • rate this
    +3

    Comment number 65.

    By "holding firm" he means by ensuring the top 1% and bankers receive their millions whilst the rest of us have to suffer austerity.

  • rate this
    +3

    Comment number 64.

    Of course he'll hold firm - it's easy to bully the weak and suck up to the powerful. Cameron has carried on the work of Thatcher, Major and Blair and giving the country to giant corporations. He's gone further and encouraged an 'every man for himself' mentality by demonising the poor and less fortunate, begrudging them even the tiny amounts of help they get. The UK is nasty now, thanks to Dave.

  • rate this
    +2

    Comment number 63.

    If DC and GO are aiming to be tougher, then that's fine - as long as they're tougher with those who can afford to a) pay high rates of tax on, b) 'earning' unwarranted bonuses, and c) claiming unwarranted expenses (starting with MPs). The austerity starts at the top, guys, NOT where it hurts the voters who put you there in the first place!

  • rate this
    +3

    Comment number 62.

    41.Robert
    Pay our debt now and flourish later! (The opposite motive of the US).

    Lets be wise.

    Doh! The debt mountain is increasing but just at a slower rate than before, even auntie is glossing over this fact.

    It reminds me of children who stick their fingers in their ears shouting lalalalalal, just so they don't have to hear the uncomfortable truths.

  • rate this
    +6

    Comment number 61.

    Changing course on the economy would plunge the UK "back into the abyss",

    D.C - take off your rose tinted glasses, we are already there thanks to your lack policies and totally misunderstanding on how to run the country.

    You don't deserve Another chance.

  • rate this
    +6

    Comment number 60.

    This government is seemingly a clueless bunch, but more importantly their policies are, and will become increasingly damaging to social cohesion in this country. I honestly don't know how Cameron and Osbourne sleep.

  • rate this
    +142

    Comment number 59.

    We should take note of Iceland, instead of celebrating the bankers that ruined their economy they are jailing them.

  • Comment number 58.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +12

    Comment number 57.

    What he means is -they will carry on until they have broken everything that goes against Tory dogma beyond repair - That is all that matters to these selfish elite one track mind politicians who are truly beneath contempt.

  • rate this
    +19

    Comment number 56.

    Putting aside my almost irrational dislike for anything Tory for one second I still find it unbelievable that the very rich are about to get a nice boost as their tax rate is cut to 45%. Watching the banks talking about delaying bonuses until April to take advantage of this is utterly nauseating and inexcusable. In this together? I think not...

  • rate this
    +1

    Comment number 55.

    21 dr carol

    We entered the abyss. In 2008 ,

    Bond markets are now a complete fiction .
    The pound has been debased .
    £100billion annual stimulus schemes are called austerity.
    Economics as we knew and thought we understood ceased to exist four years ago .

  • rate this
    +23

    Comment number 54.

    Back into the Abyss, when were we supposed to have left?

    Was it when they gave tax cuts to the highest paid whilst slashing benefits to those struggling to survive?

    Was it when they excused companies like Vodafone from paying massive tax bills whilst branding those on benefits as cheats & scroungers?

    Same old Tories "Rob the Poor to Feed the Rich" but don't forget "We're all in this together"!

  • rate this
    +1

    Comment number 53.

    At last we have some rational comments and not solely emotionally charged political cant

  • rate this
    +5

    Comment number 52.

    23,

    No we make and export fewer cars now, Ford is leaving, GM has all but gone, Honda and Nissan are all we have and they are assembly plants. All around people are on part time or zero hour contracts firms are continuing to lay off staff - there is no recovery and no end in sight, sorry to be so negative but they are the facts. Money in the form of earned wages is leaving the economy no growth

  • rate this
    +4

    Comment number 51.

    Is the government planning to erode the debt through hyperinflation with the endless money printing?

  • rate this
    +6

    Comment number 50.

    Economy...hmmmmm... do we have one of them? Can't say I have seen one for a long while.

  • rate this
    -1

    Comment number 49.

    Expect a lot of early Tory bashing and this thread as all the lefties are at home on their laptops watching day time TV and bemoaning the government, whilst all the realists are at work and unable to comment!

    The truth is, we need a smaller state... We need you to get a job and pay Tax. That is the truth!

  • rate this
    +3

    Comment number 48.

    Why not hold firm on £10m which you are 'gifting' to Afghanistani mines when our local mines (and miners) go to waste?

 

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