Britain is facing an ‘hour of reckoning’ says David Cameron

THE Prime Minister will say on Wednesday that Britain faces “an hour of reckoning” as he defends the coalition government’s economic austerity measures.

David Cameron will use his speech to the Conservative Party conference to warn of dire consequences for the country if significant spending cuts are not implemented.

Mr Cameron’s address to delegates in Birmingham comes as the latest raft of economic figures brings more grim news for the Treasury.

A plunge in exports saw the UK rack up its second-biggest trade deficit on record. The deficit in goods and services – the gap between exports and imports – grew to £4.2 billion in August from £1.7bn in July, the largest since April, the Office for National Statistics (ONS) said.

Coupled with downbeat manufacturing statistics, the figures cast further gloom over the economy’s growth prospects in the third quarter and beyond, as analysts warned that any recovery is unlikely to be sustained.

The figures followed an International Monetary Fund forecast that the UK economy would contract by 0.4 per cent this year, a downgrade of the figure predicted back in July, when IMF economists forecast growth of 0.2 per cent.

Yesterday, Mr Cameron insisted the economy was “slowly healing”, but his speech today will make clear there is no easy solution and that the government’s tough economic policies are the only option for long-term recovery.

He is due to say: “Unless we act, unless we take difficult, painful decisions, unless we show determination and imagination, Britain may not be in the future what it has been in the past, because the truth is this: we are in a global race today and that means an hour of reckoning for countries like ours; sink or swim, do or decline.”

In extracts released last night, Mr Cameron will reject Labour’s calls for a Plan B.

He will say Labour’s demand for the government to “stop worrying about deficit reduction, borrow more money and spend it to boost the economy” might sound reasonable.

But he will add: “Right now, while we’ve got a deficit, the people we’re borrowing from believe that we’ll pay it back – because we’ve set out a tough plan to cut spending and live within our means.

“That’s why interest rates are among the lowest in the world, even though the deficit left to us by Labour was one of the highest in the world.”

Mr Cameron will argue that if his government did what

Labour wants, the lenders would “start to question our ability to pay off our debts”. He will call Labour’s plan to borrow more

“a massive gamble with our economy and our future” that would “squander the sacrifices we’ve already made”.

The Prime Minister will also remind delegates that the country’s economic woes began before the Tories came to power, saying: “We are here because we borrowed and spent too much. How can the answer be more spending and more borrowing? I honestly think Labour haven’t learned a single thing.”

Despite his uncompromising assessment of the UK’s economic plight, aides insisted that Mr Cameron’s speech would be “upbeat and aspirational”, although it is not expected to contain any new policies or announcements.

After Mr Miliband’s successful speech last week, Mr Cameron will attempt to reclaim the One Nation brand for his party and renew his modernising credentials. He is also expected to revisit the Big Society, a concept many believed he had abandoned.

In a week where he has defied party members by insisting he will press ahead with support for gay marriage, he will today insist his party needs to stand for everyone in the UK.

He will say: “My mission from the day I became leader was yes, to show the Conservative Party is for everyone: north or south, black or white, straight or gay.

“But above all, to show that Conservative methods are not just the way we grow a strong economy, but the way we build a Big Society.

“That Conservative methods are not just good for the strong and the successful, but the best way to help the poor, and the weak and the vulnerable.”

He will add: “It’s not enough to know our ideas are right, we’ve got to explain why they are compassionate, too.”

Mr Cameron will also address personal issues in his speech when he talks about his Scottish-born father Ian, who died earlier this year. “It’s only when your dad’s gone that you realise not just how much you really miss them, but how much you really owe them,” Mr Cameron will say.

“My dad influenced me much more than I ever thought.”

He will talk about his father’s disability, being born without heels and with shortened legs.

“But Dad was the eternal optimist,” he will say. “To him the glass was always half full. Usually with something alcoholic in it.”

He will go on: “When I was a boy I remember once going on a long walk with him, passing the church he supported and the village hall where he took part in the interminable parish council meetings. I asked him what he was most proud of.

“It was simple – working hard from the moment he left school and providing a good start for his family. Not just all of us, but helping his mum too, when his father ran off. Not a hard luck story but a hard work story.”

And of himself, Mr Cameron will say: “I believe in working hard, caring for my family and serving.”

The Prime Minister will use his own experiences and values to call on the country to take the right path out of the economic crisis.

“This is still the greatest country on earth. We showed that again this summer, 22nd in the world population, third in the medals table. But it’s tough. These are difficult times. How will we come through it? It’s not complicated. Hard work, strong families, taking responsibility, serving others.”

Summoning the Olympic spirit that gripped the country over the summer, he will describe his best moment as putting a gold medal around the neck of the Paralympian swimmer Ellie Simmonds.

He will cite the Olympics as a reason to keep the United Kingdom together.

“Whether it was Ellie or Jess Ennis or Chris Hoy, whether our athletes were English, Scottish, Welsh or from Northern Ireland, they draped themselves in one flag,” he will say. “Now, there’s one person who didn’t like that and he’s called Alex Salmond. I’m going to see him soon to talk about sorting that referendum on independence before 2015.

“There are many things I want this coalition to achieveb but what could matter more than saving our United Kingdom? So let’s fight that referendum with everything we’ve got.”