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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  • rate this

    Comment number 1147.

    So Cameron is not for turning eh? I'm sure I heard the same sort of thing in the 80's a little while before that stance ruined that person's political career altogether! Her same stance & views are what has led us to the situation of today too & anyone who denies that is a seriously blinkered out of touch uneducated fool!

  • rate this

    Comment number 1146.

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

    In which case, Cameron will no doubt enlighten us as to exactly how money creation and distribution works.

    "plunge...back into the abyss"

    I wasn't aware we'd emerged. But anyway, I suppose a gentle abseil is better than a plunge. Hope the rope that is Plan A Plus doesn't break.

  • rate this

    Comment number 1145.


    Of course they have borrowed more. The deficit was over 12% when they took over.

    Are you suggesting that the difference between spending and revenues does not exist? That hole has to be plugged.

    Unless you can prove that the money borrowed has gone elsewhere?

  • rate this

    Comment number 1144.

    The Gove is being asked to "inject capital" into the economy the thing is THERE IS NO CAPITAL its DEBT

    We now survive on DEBT that is what most of the currency is so many people in "business do not seem to get this

    Its not just that subsidising the private sector is not capitalism there is no real capital

    What QE is doing is creating bonds(printing money) making more DEBT

    MONEY is now DEBT

  • rate this

    Comment number 1143.

    Bring back the Really Useless Party: Balls to Save the Economy - more public sector non-jobs and no more boom and bust; Burnham to Save the NHS - but not the patients; Save Education - lets have more pointless degrees; Save our Military - who can we invade now?; Vote Labour in 2015.

  • rate this

    Comment number 1142.

    And what does multi-millionaire Milliband do pray tell? Sit around his £2.4 million London mansion house in his WIFE'S name that was remortgaged with Barclay AFTER the Libor scandal. Please include ALL the millionaires playing at politics if you;re going to make this that point (which I happen to agree with my the way).

  • rate this

    Comment number 1141.

    Please remember that 13 of the last 16 years were under Labour. The Conservatives have to come each time and make cuts precisely because of Labour mismanagement. 13 YEARS! They should have fixed the roof while the sun was shining. Somehow people forget this.

    I will doubtlessly get voted down and down, as people don't want to face the truth....

  • rate this

    Comment number 1140.

    Britain is being run only to fund the Very Rich.

    The rest of the country and it's people are used as blood bank to feed from.

    All the facilities in the country, the economy, health, education, culture, etc... are only pawns in the game to suck as much out of the country as possible by people who take Millions of pounds a year.

    Who pays ?

    You do. You, your family, wife and kids pay for this.

  • rate this

    Comment number 1139.

    The biggest obstacle to recovery is delusion.

    Some believe we can borrow our way out of debt. Some think that paying years of tax entitles them to unlimited public services. Some argue our troubles would fly away by leaving the EU.

    If it were that easy, it would have been done. There's no conspiracy to make our lives worse. The sooner people accept reality, the sooner we can mend: TINA.

  • rate this

    Comment number 1138.

    If anyone suggests doing anything different Camoron and Osborne say we would be come like Greece. However there are many places in between before we would get anywhere near Greece. If borrowing is going off the graph now, why not use it to stimulate the economy instead of giving it to the banks? Sticking up for bankers' bonuses whilst sticking it to benefits claimants is not the right way to go

  • rate this

    Comment number 1137.

    There were now "some signs that we can turn our economy round.

    Amazing I never knew Cloud Cuckoo land was visible from earth.

  • rate this

    Comment number 1136.

    I'd say i'm looking forward to 2015 when this lot will be out on their ***** but the alternatives are not much better.

    The Gov needs to be completely overhauled. Rich boys messing around, drinking on the job, acting like children during debates, no idea what the average person goes through etc etc

    How can those so detached from real life be making the decisions that affect so many?

  • rate this

    Comment number 1135.

    Dave, I`ve got one or two house-hold items that say "Made in England".
    But they are 30 years old!
    When are we going to start making things?

  • rate this

    Comment number 1134.

    I suggest...leaving the rubbish called the "EU"
    ... and, of course, people should continue to vote for UKIP.
    And then what, exactly?

  • rate this

    Comment number 1133.

    I'm under no illusion that you've all the answers.
    I'm also aware that we now live in such an oppressive, utitilitarian environment (I won't call it society), espoused over time by the likes of Jeremy Bentham and Saul Alinsky, that given the stark choice I'd go your way.
    It doesn't matter what other structure emerges, as it inevitably would.
    It would have to be better than this.

  • rate this

    Comment number 1132.

    The tipping point is near on plan 'A' - there is only so long that the country can sustain flat growth with rising national debt. This government is going to have to bite the bullet and speculate to accumulate. Act radically on reducing all taxes on employment, look again at VAT and inject money in to the economy by redirecting QE funds, otherwise we'll be rearranging the chairs on the titanic.

  • rate this

    Comment number 1131.

    Remember people like Osborne and Cameron are in politics as a 'hobby'...I say that as they don't derive much of their total income or wealth from it (at best it gives them some pin money) and if they get made 'redundant' it has no meaningful financial impact on them.

    I wonder if the country can afford to be governed by such people anymore..whatever their party or alternative sources of wealth.

  • rate this

    Comment number 1130.

    1085. ollie_Stone - The Cons got more votes than any other Party but not an overall majority. So we have first and third coalition, how fair would a second and third coalition have been. A Party being in power that 'we' did not vote for is a downright lie. I for one can't wait for the next GE and TV debates with rehearsed 'kids at bath time' interjections and closet bigot statements.

  • rate this

    Comment number 1129.

    Next month, the high earners will have their top rate of income tax cut from 50% to 45% and, according to Dave and Gideon, it won't cost the taxpayer a thing.
    It sounds very much like a magic money tree to me.

  • rate this

    Comment number 1128.

    He's right: there isn't a magic tree. The banks sold us that idea, along with the economy. Since we're not going to borrow, the burden lands squarely on the tax payer, and since it was the banking industry wholesomely exploiting the system (once more), they should suffer the repercussions of capped bonuses (and lower commission).

    If "we're all in this together", what can be more fair?


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