David Cameron to tell Britain: keep calm – but pay off your debts


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David Cameron will today warn the British public that turning round the economy will be a long haul but he will insist that the country should not be "paralysed by gloom and fear".

In his closing speech to the Conservative Party conference in Manchester, he will concede that the flatlining economy is in a worse condition than he expected when he became Prime Minister last year. But he will argue that the pain will be worth it, and end on an optimistic note about the future.

Mr Cameron will say: "The only way out of a debt crisis is to deal with your debts. That means households – all of us – paying off the credit card and store card bills. It means banks getting their books in order."

Last night his aides insisted he was not telling people to repay all their bills immediately – advice which, if taken literally, would further dampen consumer spending and could push Britain into a "double-dip recession". Admitting that people "want to know why the good times are so long coming", he will say: "This was no normal recession; we're in a debt crisis."

His speech was billed by advisers as "realistic but optimistic, honest but not gloomy". It will reflect growing fears among ministers that the next election, due in 2015, might have to be fought without Britain having experienced the strong recovery they had expected by then.

Mr Cameron will demand that everyone plays their part in turning the country round. In a hint of more curbs on workplace rights and trades union powers, he will say: "If we fool ourselves that we can grow our economy, mend our society, give our children the future we want them to have ... without effort, without correcting past mistakes, without confronting vested interests and failed ideas, then no, we're not going to get anywhere."

The Prime Minister will say that the "hard-working, pioneering, independent, creative, adaptable, optimistic, can-do" qualities of the British people will enable the Government to "turn this ship round". He will argue: "The truth is, right now, we need to be energised, not paralysed by gloom and fear. Half the world is booming – let's go and sell to them."

Mr Cameron will reject calls for a "Plan B" involving slower than planned spending cuts. He will argue: "Our plan is right. And our plan will work. I know you can't see it or feel it yet. But think of it like this. The new economy we're building: it's like building a house. The most important part is the part you can't see – the foundations that make it stable. Slowly, but surely, we're laying the foundations for a better future. But this is the crucial point: it will only work if we stick with it."

He will say: "We need to tell the truth about the overall economic situation. People understand that when the economy goes into recession, times get tough. But normally, after a while, things pick up. Strong growth returns. People get back into work. This time, it's not like that."

The speech is expected to be light on policy as Mr Cameron sets out his credentials to lead the country through the economic storms, inviting a contrast with the relatively inexperienced Labour leader, Ed Miliband.

He will say: "So much of my leadership is about unleashing your leadership. Giving everyone who wants to seize it the opportunity, the support and above all the freedom to get things done. Giving everyone who wants to believe it the confidence that working hard and taking responsibility will be rewarded not punished. So let's reject the pessimism. Let's bring on the can-do optimism."