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
    +3

    Comment number 1167.

    @1025. CaptainJack
    Spending is not actually the issue. Spending on the wrong things is the real issue.
    Buying Indian software, American jets, Austrian guns, German cars, French trucks..... most of our taxes are spent abroad creating jobs, demand, wealth in OTHER COUNTRIES. Even worse that this is on credit. No wonder its a mess - Liberal, Labour and Conservative are as bad as each other.

  • rate this
    -3

    Comment number 1166.

    1121.york1900

    Yes and Labour did everything for business and the working class in their years by pouring money into everything and creating non jobs in the misguided belief that money (rather than ideas) makes things better.

    It didn't!

    Instead they left us with a big fat whopping IOU that we now have to pay for but the labour fanboys refuse to acknowlege this and blame everyone else!

  • rate this
    -5

    Comment number 1165.

    DMB TROMP> I'm with you all the way. Clicked possitive on your comment but this Labour loving page only registers negative. !!!!!

  • rate this
    -4

    Comment number 1164.

    1st things 1st, me no tory, but people on here, who criticise the Tories for the hole we're in, as if they caused it, jeez! how forgetful?! Although those Labour MPs with the audacity to also criticise as if the mess has nothing to do with them, really take the biscuit. I hope Labour don't get in next time, they can't be trusted, even if it means the Tories, who DO look after their own, get in

  • rate this
    +9

    Comment number 1163.

    To 'Here We Go..'
    Two more years, two more years, two more years
    Two more years, two more years, two more year ear ear ears.
    Two more years two more years two more years
    Two more year ear ear ear ears.

    End in tears end in tears end in tears
    End in tear ear ear ear ears.

    Your tears
    Your money
    Your children
    Your country

    End this coalition of inequality and inaction now!

  • rate this
    +4

    Comment number 1162.

    imo economy would benefit from less central gov & more local authority responsibility.
    Something that is recognised by many major economists & many politicians.
    The billions the BoE lent at cheap rates to the banks to lend would be better being lent to local authorities, then they could invest in housing, get rent back to reinvest on local schools hospitals etc, rather than make private LL rich.

  • rate this
    +1

    Comment number 1161.

    "Bastiat
    Cartel behaviour is a conspiracy to defraud, & should be prosecuted under fraud"

    How come the 1890s USA, and most developed economies since, had to impose anti-trust laws? You'll notice that most laws are introduced because the existing ones are inadequate even if they appear to prohibit the behaviour in question.

    What do you think about (say) traffic laws if we would don't need them?

  • rate this
    -6

    Comment number 1160.

    People seem to forget why we got into this mess in the first place. Three words - Brown, Balls & Miliband.

    They spent for 13 years on creating a bloated public sector (which is a false economy) as evidenced by the deficit being £73bn @ the height of record tax receipts in 2007.

    Nothing was saved for a rainy day like they had the sense to do in Germany & Canada.

    Labour = economic diaster.

  • rate this
    +1

    Comment number 1159.

    1134. White Rose

    "And then what, exactly?"

    Become the 51st state obviously, out of the frying pan into the fire...

  • rate this
    +7

    Comment number 1158.

    1141.DMBTomp
    "I will doubtlessly get voted down and down, as people don't want to face the truth..."

    No.
    You'll get voted down because what you wrote is complete and utter rubbish!

  • rate this
    +8

    Comment number 1157.

    No change ! - we are driving towards a brick wall but No Change !!

    Don't worry though the poor/disabled/sick/low-paid/unemployed are taking the brunt of the impact to protect the very rich -so that's OK then. It's gong to be a long,hot summer on the streets...

  • rate this
    +8

    Comment number 1156.

    Well Cameron is wrong, so very wrong, there are many alternatives to this economic ideology. For starters how about demolishing capitalism and embracing freedom, or stay wage slaves all your lives and suffer? You get what you vote for!

  • rate this
    +2

    Comment number 1155.

    The problem is that our politicians always think in the short-term, and immediately link the economy to the movement of money. We have to work to develop renewable energy and a sustainable way of life, and accept that the economy that we get out of it is the best we're going to get, which isn't what it was before 2008, if we live in the real world, where resources are finite.

  • rate this
    +4

    Comment number 1154.

    How transform the UK into a US style low public service slightly lower tax economy:
    1. Give all the money available for services to the banks.
    2. Cut services and benefits
    3. Let banks keep the money and pay the public off in the form a shares bribe
    Wake up people

  • rate this
    +7

    Comment number 1153.

    David Cameron Looks and acts like a statesman, who is in charge of his troops. Very unlike the clones on the Labour front bench who all sing the same pre-programmed diatribe of rubbish
    -Are you on another Planet because on planet Earth Cameron has surrounded himself with a bunch of identitwit interchangeable Tory millionaire toffs!

  • rate this
    +2

    Comment number 1152.

    Many Socialists here decry the bankers' personal actions, and want tough reforms... you're sick of having your wages taken away to pay for the corporate welfare bailout of the personal decisions of a few strangers.

    How you change your tones when it is you who makes stupid decisions, and want the rest of us to bail you out through welfare programs benefiting you.

    Hypocrisy is your name :D

  • rate this
    +2

    Comment number 1151.

    Cameron's policies are generally unpopular (despite media support) and he seems uncompromising... one therefore has to wonder whether he wants to be re-elected at all, especially considering how much money Blair and Major made after they left office.

  • rate this
    +3

    Comment number 1150.

    David Cameron: There is no alternative on economy.

    Yes Dave, you are absolutely right, it's time for you to go!

  • rate this
    +3

    Comment number 1149.

    Election NOW!!! oh wait, that didn't work the last time...

  • rate this
    +3

    Comment number 1148.

    1094.LeftLibertarian

    '50% less of nothing much is still nothing much'

    I think your find 50% less of nothing much is nothing much plus 50% so still a positve - isn't it?

    at least labour are looking at bring back the 10p rate of tax - when you have no economic plan, I suppose the defult position is to try an revive an out dated policy - is this sustainable politics?

 

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