David Cameron defends debt reduction strategy

Published on Monday 21 November 2011 14:03

DAVID Cameron admitted today that reducing Britain’s debts was proving “harder than anyone envisaged”.

But the Prime Minister blamed those same debts for acting as a “drag on growth” and insisted that the Government had to press on with its deficit reduction plans.

Speaking to business leaders at the CBI conference in London, Mr Cameron insisted there was no justification for claims that additional spending now would pay off later.

“Yes, getting debt under control is proving harder than anyone envisaged. High levels of public and private debt are proving to be a drag on growth, which in turn makes it more difficult to deal with those debts,” he said.

“But this also undermines further the case for adding to the national burden of debt with even more borrowing.

“Yes, there are some who seriously try to argue that additional spending and borrowing will actually lead to less debt in the end, despite the fact that no evidence supports this assertion.

“These arguments are just a way of avoiding difficult decisions, the kind of something-for-nothing economics that got us into this mess, which is why no indebted European country is taking that path.”

Mr Cameron said the crisis in the eurozone was having a “chilling effect” on the economy, but that Britain’s “ills” could not be blamed on that alone.

“No-one else is responsible for our own debts or our deficit,” he said.

The Prime Minister acknowledged that, despite “some encouraging signs” from retail and exports figures, “fears about the immediate future are real”.

“Paralysis in the eurozone is causing alarm in the markets and having a chilling effect on economies in many countries, including our own,” he said.

Dealing with the country’s debts were just as important as pushing growth, he went on.

“Those things aren’t alternatives, they are essential companions. We will not get one without the other,” he said.

“People who argue that traditional fiscal stimulus, extra spending funded by even more borrowing, is the right answer are not just wrong - they are dangerously wrong.”

Mr Cameron acknowledged that there was a danger of a “lost generation” of young people as youth unemployment continues to rise.

In a question-and-answer session after his speech, Mr Cameron said youth unemployment was a “scourge”, but insisted it had been a problem for the past decade.

“There isn’t a single answer, whether it’s for a graduate or a 16-year-old school-leaver with bad qualifications from a school that has not been serving the community,” he said.

“We need to keep the 16-year-old in school until 18 and we need to expand the workplace with retraining and help people get skills.”

He made it clear that the Government was sticking to its Plan A for reducing the deficit, saying it had the support of business.

“The message I hear is that confidence is the key, and that depends on having a proper programme for to debt and deficit under control. We have to stick to that plan - that is absolutely vital.”

The CBI has been calling for a Plan A Plus to boost growth and jobs but has supported the Government’s programme of austerity measures.

The Prime Minister told the 1,000 businessmen and women at the conference that the Government was looking at how to make air passenger duty “fairer” following strong representations about the tax from industry and overseas businesses.

But he added that the Government could not just “wave away” taxes because of the size of the budget deficit.

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Harry Palmer

Monday, November 21, 2011 at 11:20 PM

David Cameron who sold 1.5 billion of taxpayers money in Northern Rock to the great tory doner tax dodger Richard Branson. You disgusting typical tory. This is the ultimate bank robbery. State sanctioned by a tory Prime Minister helping his private educated tory mates. Viva Revolution!!

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maisiedotts

Monday, November 21, 2011 at 08:00 PM

Nothing to do with the tories stupid policies for growth - no?

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Canny Mann

Monday, November 21, 2011 at 07:02 PM

No jobs for 16 year olds as Tory Leader asserts his decision to keep teenagers at school until 18................................................ 17 year olds escape from school to join the armed forces, only to be put in the front line of the war on terror against the Taliban....... Middle class families squeezed back into working class poverty, population left to sink or swim, people no longer enjoying the support or defence of their politicians............................................. Scotland cannot trust the union. It is time for independence. If the people can only trust and believe in themselves, then let scots and scotland be free................................................................. Alba gu brath...

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