Government spending cuts will have to go on until the end of the decade, David Cameron warned yesterday, as economic turmoil continues to blight the British economy.
In an interview Mr Cameron said he didn't "see a time" when the government's austerity programme would end. But he suggested that tax cuts could still go ahead – as long as they were funded by even greater public spending reductions.
Asked by the Daily Telegraph whether the austerity programme would now last until 2020, the Prime Minister replied: "I think it's going to be... a period for all countries, not just in Europe but I think you will see it in America too, where we have to deal with our deficits and we have to have sustainable debts. I can't see any time soon when… the pressure will be off.
"I don't see a time when difficult spending choices are going to go away." But he added: "Now, that doesn't mean that you can't cut people's taxes... You can do exciting and radical and Conservative things at the same time as having difficult overall spending choices."
After winning the general election in 2010, the Coalition initially said that its austerity programme would finish by 2015.
However in the budget George Osborne suggested the programme would have to be extended to 2017 and Mr Cameron now faces the prospect of fighting the next election with a pledge to cut spending for another five years.
He said: "We are in a very difficult situation. There is some good news, we've just seen inflation fall again.
"But, I don't deny for a minute that it is a lot tougher than the forecasters were expecting. I think the impairment to our economy in the bad years, the damage done to the banks, the indebtedness of our households, the extent of government debt, the extent of the whole growth model was unbalanced. You know, that impairment has been greater, it's been tougher to recover."
In the interview Mr Cameron also said that he does not believe that Britain should leave the EU and will never campaign for an "out" vote in a referendum.
He said were that to happen that Britain would become a "sort of Greater Switzerland" which "would be a complete denial of our national interests".
Instead he indicated that he would seek to negotiate a "new settlement" with Europe which will be put to a referendum rather than offering an in-out vote.
In a move to appease rebellious backbench MPs he also disclosed that Conservative MPs who voted against Government plans on reforming the House of Lords will still be considered for ministerial promotion in the future.