Government will continue 'difficult' spending cuts, insists David Cameron


Tuesday 08 May 2012 17:15

Prime Minister David Cameron insisted today the Conservative-Liberal Democrat coalition was “as important and necessary” now as it was when the two parties came together in Government two years ago.

In a joint appearance with Deputy Prime Minister Nick Clegg, Mr Cameron insisted the Government could not "let up" on its deficit reduction strategy but said it was "not just about the dry numbers of the economy".

He promised to get behind "families that work hard and do the right thing".

Amid heightened tensions between the Tories and Lib Dems after the two parties' poor showing in last week's local elections, Mr Cameron reaffirmed his commitment to the coalition formed in May 2010.

"I believe the need for that coalition - two parties working together to solve the problems we have in our country - I think is as important and necessary today as it was two years ago," he said.

The Prime Minister said the coalition would keep to its "difficult" spending plans to tackle the country's debts.

"We can't let up on the difficult decisions we've made to cut public spending and to get the deficit and debt under control.

"I know it's hard, I know it's difficult, but when you've got a debt problem the one thing you mustn't do is keep adding endlessly to that debt."

He said the Government needed to keep interest rates low, which would help firms expand and families cope with their mortgages, and "redouble" its efforts to promote economic growth.

The Prime Minister added that he and Mr Clegg were driven by the desire to create something "more worthwhile" than Labour.

"We are both in this to try and build something for the country that is more worthwhile than what we inherited from the last government," he said.

"What we want to do is get behind families that work hard and do the right thing."

He went on: "Everything this Government does, it's not just about the dry numbers of the economy, it's about building something that is really worthwhile in our country as we take these difficult decisions.

"That's what fires me up, that's what the next few years have got to be about, that's what this coalition Government is going to be about."

Mr Clegg said the Government would "constantly strive" to do more to promote growth, as well as reducing debt, but warned that voters should not expect quick results.

It was worth remembering, he said, that there had been a "socking great heart attack at the very centre of our British economy" and there was a six to seven-year plan in place to cure it - well beyond the next general election.

"It is painstaking work recovering from that and it is not something we are going to achieve and so we need to bear in mind the enormity of the trauma we suffered," he cautioned.

There was a "moral duty" to deal with the debt so future generations did not have it hanging over them, he added, but conceded that more efforts were required.

The two main areas that need attention are lending to small business and investment in infrastructure by both the public and private sectors, he suggested.

"Dealing with the deficit is a means to an end. Austerity alone does not create growth. It is a necessary but not sufficient step. But the end, what we are absolutely dedicated towards, is creating jobs, creating prosperity, creating investment, creating opportunity, creating optimism and hope in our country.

"We know we need to do more, constantly strive to do more, to create and foster the conditions for growth."

The two leaders were taking part in a question and answer session with employees at the CNH Tractors plant in Basildon, Essex, where Labour won seats in last week's local hammering for the power-sharing parties.

Mr Clegg joked that the blue and yellow livery of the vehicles was an appropriate symbol of the coalition.

Mr Cameron said the coalition partners remained separate parties with distinct identities, but were working together in the national interest.

The Prime Minister said: "We are different parties, the Conservative Party and the Liberal Democrat party, and we don't always agree.

"But I would argue in the last two years, the Government has done a lot of things that needed to be done. We have cut the deficit, we have made difficult decisions about cutting some areas of public spending, about having to increase some taxes, because we inherited a situation where our budget deficit was bigger than that in Greece.

"Although we might have had different views, we put them aside, we cut the deficit for the good of the economy."

Mr Cameron said that on issues such as welfare, immigration and education "we are not always going to agree but in the end we have produced some pretty chunky, clear policies on things that needed to be done".

He added: "Of course I would like to be running a Conservative-only government, and Nick would like to run a Liberal Democrat-only government. You, the voters, decided that no one won the last election and effectively you were asking us to work together.

"I would argue that despite the differences we sometimes have and in spite of the arguments we sometimes have, we have put those differences aside and taken pretty tough action on the deficit, on welfare, on education. I think this coalition Government is delivering, but I accept it is a tough time in our country, it is a difficult time in our country and we have got more work to do."

Mr Clegg asked the audience: "Judge us by our actions, not by our words, and - with the greatest respect to the members of the press - judge us by what we do, rather than what people say we are doing."

The Lib Dem leader said he was "hugely proud" of the Government's implementation of Lib Dem policies such as the Pupil Premium for children from disadvantaged backgrounds, raising the income tax threshold for low-income workers and boosting apprenticeships.

"These are things that we are delivering through coalition, in the same way that David is delivering things his party believes in," said Mr Clegg.

"You always get ups and downs in politics, but I think the idea of politicians from different parties setting aside their differences and working in the national interest, at the end of the day, is something I hope most people think is a good thing to do."

Mr Cameron said the level of debt in households, banks and in Government had made recovery "difficult".

He said there was "some rebalancing going ahead" in the economy, with rising exports, but added: "When you think of the enormous boom we had in terms of housing - and banking and finance and Government spending and also, I would argue, uncontrolled immigration as well - the drivers of growth were completely unsustainable.

"Now those drivers have gone, it's really tough, hard, pain-staking work getting our economy to grow, but it must be the right thing to try and deliver growth which is based on real hard work and effort: proper jobs, proper manufacturing, proper industry, based on the fact that Government can't go on spending and borrowing beyond its means."

Mr Cameron stressed the need to be "very frank with people", adding: "It is tough, it is difficult, but these are the right steps to take so that we don't just pump the bubble back up and try and enjoy the sort of growth we had which was something of a mirage in recent years, but let's build something really worthwhile, and yes it will take time, but it will be built to last, rather than as the last recovery was, built on sand."

Mr Clegg said the British economy would be 11% smaller by 2016 than it would have been without the 2008 crash.

He said: "No government can wave a magic wand and wish that away, it's just that the nature of that cardiac arrest that took place in 2008 just takes some time to recover and it means the economy is smaller than it would otherwise have been."

Mr Clegg stressed he was "genuinely very optimistic" for the future of the country, adding: "We, I think, we have undersold our strength and potential as a country, as a manufacturing powerhouse."

He added the Government was "dedicated" to rebalancing the economy, making sure growth was sustainable, "not the boom and bust of the past".

Both Cameron and Clegg said it was right that Parliament should press ahead with reform of the House of Lords, but insisted that the change - expected to feature in tomorrow's Queen's Speech - was not a particular priority for them.

Mr Cameron said: "I wouldn't for a moment say that this is the most important thing the Government is doing. Of course it isn't.

"But Parliament is capable of doing more than one thing at a time. Do I think that it would be a good idea if Parliament delivered a House of Lords that had people who were elected by you - the members of the public - to pass the laws that we all have to live by? Sure I do.

"Every major party went into the last election saying they wanted to reform the House of Lords. I think it is a perfectly sensible reform for Parliament to consider.

"But what matters, the things we are really focused on, are getting the deficit down, getting our economy moving and creating a country and a society that is more worthwhile - where people feel 'If I put in, I get out, if I work hard and do the right thing, I will be able to do better for myself and my family'.

"That's the programme that the Government is really pursuing, but sorting out some of our constitution at the same time - I don't see why Parliament can't deal with that."

Mr Clegg said that he cared "a lot more" about issues like apprenticeships, help for poorer schoolchildren and raising tax thresholds than about House of Lords reform.

But he added: "It doesn't mean that we can't do other things.

"I think that, although it is wildly controversial in Westminster and people get terribly hot under the collar, actually most people think that the principle that the people who make the laws of the land should be elected by the people who have to obey the laws of the land is not as controversial outside Westminster as it appears to be in Westminster.

"A smidgen of democracy I don't think will go amiss, since we've been talking about it for about 100 years."

Both Cameron and Clegg played down suggestions that the victory of Socialist Francois Hollande in the French presidential election last weekend indicated that the tide of opinion in Europe was moving against the kind of austerity programme they are implementing in the UK.

Mr Cameron said: "If you actually look at what President Hollande is suggesting in France, his programme for getting rid of his budget deficit is pretty much on a pathway with ours.

"I think it is a bit of a myth to believe that somehow there are some people in Europe who are going to spend a lot more money and those of us who realise we have to deal with our debt and our deficit. We have all got to deal with our deficits. If we don't deal with our deficits, our interest rates are going to go up. That's the fact and that is why we have got to deliver these difficult public spending reductions."

Mr Clegg said that it was a "caricature" to suggest that Mr Hollande had torn up the deficit reduction strategy.

"I think President Hollande has made it very, very clear that he wants to place a lot of emphasis on growth," said Mr Clegg. "I don't think anyone would disagree with him. Who is going to disagree with saying we need to try to grow our economies? That's what we are all about.

"He knows as well as all of us do that you can't create growth on the shifting sands of debt, you have got to create stable foundations."


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