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".


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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  • Comment number 107.

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

  • rate this

    Comment number 106.

    I'd love to know what plan this is we're supposed to be sticking to. The logic of this Government seems to be that it is OK to borrow money to pay for the loss of tax revenue caused by the recession that's caused by not borrowing money, or to give to banks so that they can lend even less money to business. But kickstarting the economy? That will just leave a legacy of debt for future generations!

  • rate this

    Comment number 105.

    DC: "My motives for sticking to the plan are exactly about doing the right thing to help families and business up and down the country."

    This is a lie. The only thing Dave cares about is getting a majority in the next election. Do the tough stuff now, offer a few sweetners closer to the time...

  • rate this

    Comment number 104.

    Cameron and his cronies are totally out of touch and if they changed direction now it would just prove the other parties were right and knock the bottom right out of the Tory party. So they think its better to carry on and destroy the country rather than admit they are RONG.

  • rate this

    Comment number 103.

    lets look at the other side of the story what other experts say. increase in maluttition increase in food banks no investment in infrastucture the bankers left alone to do what they want. most of the jobs advertised at the moment are part-time and low paid below the so called living wage. what future are we building its one where when we have to replace our infrastucture we will increase debt

  • rate this

    Comment number 102.

    #56 if you studied last years budget rather than simply repeating the Lab party line you will find in addition to the top rate tax cut provisions which reduce tax reliefs (with exceptions) claimed by rich to max of £50k or 25% of income which will make the 45% pinch more tightly than the 50% rate introduced by Labour

  • Comment number 101.

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

  • rate this

    Comment number 100.

    "You turn if you want too" Is a phrase I remember well from the 80's. But Dave and his boys are intent on outdoing even Maggie in the lets hold fast and damn the consequences stakes. Its one thing to stick to your guns to the point of insanity and beyond, its quite another to insist we all come along for the ride with them.

  • rate this

    Comment number 99.

    The economy is disintigrating on a daily basis (the latest victim being Thomas Cook). How much worse will the collapse have to be before 'Nero' Cameron stops fiddling and listens to business experts?

  • rate this

    Comment number 98.

    We got into this mess through borrowing what we couldn't afford.
    The economy will turn around when the Eurozone and US sort themselves out. It will be much better for the UK if we haven't increased our debt when that happens.

    If we start to borrow we will look weak. Interest rates and mortgages will go up.
    It's fine for Miliband and Balls and their wealthy Labour chum the can afford it.

  • rate this

    Comment number 97.

    Mr Cameron does nnot want to borrow more in order to increase "Capital Spending" (see Vince Cable's recent comments).
    However, there is another source of revenue.Surely, since a significant section of Society is struggling really hard to make ends meet it makes sense to ask those of us who have disposable income to pay more tax.
    Increasing income tax is, I think, the equitable solution

  • rate this

    Comment number 96.

    I wish Vince would do the honourable thing and join the Labour Party. It's where he came from and where he belongs!

  • rate this

    Comment number 95.

    49.Richard_swfc - I assume you are a right winger watching daytime TV as you have had time to comment! Well done - you have revealed the government's real agenda to shrink the state as small as possible so thanks for that. Mr Cameron thinks we will end up with a better Britain - better for who?

  • rate this

    Comment number 94.

    Post 63.

    By "holding firm" he means by ensuring the top 1% and bankers receive their millions whilst the rest of us have to suffer austerity.
    You forgot to add paid for by the cuts to pensioners, disabled and children but financed by taxpayers.

  • rate this

    Comment number 93.

    "back into the abyss". Did we ever leave it?

  • rate this

    Comment number 92.

    Vince Cable is right, we do need investment. He's probably the only person in government who can see we are going no where under the present plan. We have a political system which sees so called u turns as weakness, which is exploited by the opposition, rather than a change of direction for the good of our country. They have to start putting the UK first rather than their own political credibility

  • rate this

    Comment number 91.

    We're all paying increased taxes (except for Amazon etc), so where is the money going Dave ? Where are our public services ?

    You've had three years to fix the economy, and it's actually getting worse. The time to blame the last government is over Dave. You failed.

  • rate this

    Comment number 90.

    Stupid or a confidence trickster?

    Either way, by some means Cam needs to effectively redistribute 12% of the top incomes (inc tax avoidance) to the bottom earners (£22 billion), with local monetary looping this boosts high streets by £100 billion (per year) and goes a long way to fix the local economies

    Increased tax revenue and profits plus benefit savings follow, it's self funding, zero cost

  • rate this

    Comment number 89.

    If the pound is the Barometer of this government Carry on Cameron should achieve parity with the dollar and euro by 2015. Britain going bust, closing down fire sale of the few remaining assets coming soon, the Chinese are coming

    To post 41 Robert and how many euros can you buy with you inflated pounds you don't seem to get it

  • rate this

    Comment number 88.

    It starts and ends with housing

    Existing house owners are being subsidised with low interest rates which is stopping house prices collapsing. This is due to the for of the souring of the banks bottom line on risk exposure

    The banks know house prices have to drop and therefore are slow to lend and demand high deposit criteria

    It's not rocket science and we are gong the low road not the high road


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