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.”

End Quote

"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
    +4

    Comment number 207.

    We could cut even more costs by scrapping MPs after all what do they do for you? There are 360 coalition MPs, do they all agree with DC’s / GO’s policies? I think not yet how many speak out and why not? Because they are in it for themselves and the party and the country is suffering because of it.

  • rate this
    0

    Comment number 206.

    The lib dems & Labour are plying this myth that there is an answer to this within the current FAILED& fraudulent financial system this is PATHETIC! Really it is. The system HAS collapsed all that is happening is the delaying of the inevitable

    Some say it is a consequence of a endemic fraudulent system others go further & say it was designed to do this

    Either way the question is WHAT REPLACES IT

  • rate this
    -33

    Comment number 205.

    The left leaning Cable does what all left wing MPs do: call for populist, vote grabbing policies with no regard to the consequences. They always end in disaster. That's what got us in this mess.

  • rate this
    +50

    Comment number 204.

    Let's stop talking about austerity as Boris Johnson has remarked. Instead, let's discuss and deliver growth, efficiency, improvements. Just doing more of the same is unimaginative and downright unacceptable. It's a monochrome and dumb solution. This continued punishment of the 99% of us because of the 1% who screwed up will guarantee the Tories are resigned to the scrap heap at the next election.

  • rate this
    +4

    Comment number 203.

    164: Britains small Shareholders and Pensioners have already lost their Shirts due to City and Wall Street corruption, do they have to lose their trews too ?

    What about the patenting of genetics (Keiser Report) ?
    Will Monsanto be charging everyone extra bread for their bread?
    DNA monopolies all round !
    ( Wait a minute I want to register a few designs.......)

  • rate this
    +61

    Comment number 202.

    Tories are done in this country. The people gave them a chance to right the wrongs of the past. They failed themselves, their party and this country yet again. Time to stop blaming other economies Cameron. This falls at your feet.

  • rate this
    0

    Comment number 201.

    "I know Dave, we are sticking with the plan but we have got a plan B should it, and it looks like it is doing, fail?"

    "Dave? Dave? damn he can run fast!!"

  • rate this
    -13

    Comment number 200.

    Balls n Moribund took us into this mess and have no credibility, saying ANYTHING to garner popularity and votes.

    The EU is in recession, the UK's journey is going to take longer, but putting the economy on a sound footing, rather than ramping up loads more debt is right in the long term.

    The Coalition is sticking with unpopular policies. Labour would do whatever they thought would be popular.

  • rate this
    +6

    Comment number 199.

    Another thing is we never asked for this, we never asked the government to spend or borrow they did this themselves, they should suffer they should take pay cuts, loose there fancy drivers huge houses followed by the second home..absolute joke this country is if I had the money I'd leave.

  • rate this
    +26

    Comment number 198.

    The headline should read
    "We will hold firm on INCREASING debt yet still blab on that we are doing the opposite".

  • rate this
    -6

    Comment number 197.

    Dont agree with stance on Europe, environment, bonuses, etc. But I do agree with austerity. We're far too much in the red for borrowing to be an option. National debt is growing. Defecit only reduced by 25%. We need even more cuts to catch up on remaining 75% overspend. For the sake of our future, I'm up for taking a drop in services for the next few years. We'll still have it better than most.

  • rate this
    +7

    Comment number 196.

    I would love to ask DC & GO ..... Give me names that can 100% fly the label ... "MADE IN BRITAIN". As in British, not foreign companies who are buying up this small island. As London is a foreign city doesnt say much for being proud to be British. The only thing these idiots can brag about is the Finacial Capital .... oh yes, the C capital of the world. Give him a Blue Peter badge.

  • rate this
    +56

    Comment number 195.

    Barak Obama got it right, Cameron is a lightweight. As a personal opinion, I would go further and say he hasn't a clue economically and the coalition simply isn't working for the better good of the nation. Worse, we seem to be going through a period of political namby pamby with no party bringing forward a significant strong leader, which is what the country desperately needs.

  • rate this
    +8

    Comment number 194.

    We will hold firm on economy, I can see that Mr Cameron, you give 25 pence a week rise for those reaching 80 years, which is the cost of a cup of milk. Surely we all deserve a good bit more than that. BEEF OUR PENSION ENTITLEMENTS UP A BIT MORE.

  • rate this
    -44

    Comment number 193.

    In my view, the govt. should make sure every loop-hole is available to bankers to by-pass the EU bonus cap. Shareholders should be the only people with the power to cap pay packages.

  • rate this
    -7

    Comment number 192.

    // GrumpyGeorge
    But hey, let us help our chams who are board dorectors in privatised (ex-national companies) Who cares about the Plebs!//

    Not the left, who were and are happy to see the plebs' jobs stolen and wages decreased by immigrants, and have no problem with high salaries for non-jobs in the public sector.

  • rate this
    +7

    Comment number 191.

    "We will hold firmly to the steering wheel and drive the country off a cliff"

    Well if you voted this government in you get what you deserve, a destroyed economy, protected banking usury, a destroyed NHS, wage slavery until 70+ and secret courts.

  • rate this
    -6

    Comment number 190.

    179.lefty11

    And your report?

    Eating pies A+
    Sacking your own workers A+
    Hypocrisy A+
    Puffed-up windbaggery A+
    Getting elected at local elections E
    Running your own business D-

  • rate this
    +3

    Comment number 189.

    None has an answer, not DaveorEdorVinceorMervynor ...
    We (Government or individuals) don’t earn enough to pay for what we want (benefits, NHS, iPad, housing).
    We make up the discrepancy by borrowing (deficit, payday loan).
    Where is the strategy to reduce the borrowing by increasing the earning?

  • rate this
    +7

    Comment number 188.

    The coalition should never have been formed. We should have had a re-election years ago. That being said I'm not sure who to vote for now in fear they would form a coalition with the Tories again. Clegg caved

 

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