Deputy Prime Minister and Prime Minister economy speech
This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
The Deputy Prime Minister and Prime Minister are visiting a business in Essex today to talk about the economy.
The Deputy Prime Minister is expected to say:
As the Prime Minister said, the Coalition is now two years old. Recent weeks have seen disappointing news on the economy. Both parties in the Government took a hit in the local elections. And it is only right that we now take stock.
Our parties came together to rescue, repair and reform our economy. We’ve taken difficult and decisive action to keep the country safe in the immediate future. But we must never lose sight of why we are doing this; what we are trying to achieve; and where we can do more to get it right.
First: we have to remember our economy has undergone a massive trauma, the depth and nature of which we are only beginning to fully grasp.
2008 was like a giant heart attack. The banking sector blew up. The housing bubble burst. People - and government - had astronomical debts they suddenly couldn’t afford. And you cannot recover from that overnight. Our task is nothing short of rebuilding a new economy out of the rubble of the old and that is going to take time.
Second: we don’t just have economic responsibilities here, but a clear moral responsibility too. We have been living under the shadow of debt, against a backdrop of cuts, for two years now. Imagine living like that for years and years with no end in sight. Imagine if, instead of taking the difficult decisions now we left them for our children to take.
Ducking the tough choices would only prolong the pain condemning the next generation to decades of higher interest rates, poorer public services and fewer jobs.
We are taking the tough choices not because we want to, but because we have to - any government would have to do the same.
And when our critics say that we are driven by some sort of ideological obsession with shrinking the state that is plain nonsense.
By the end of this parliament we’ll still be spending over £730 billion. That’s around 42 per cent of GDP - more than any year between 1995 and the collapse of the banks in 2008.
Finally, third: we must never forget that tackling the deficit is a means to an end and the end we all seek is growth.
Our goal isn’t balancing the books for the sake of it, but doing so to meet our real aim: jobs; businesses investing; entrepreneurs getting off the ground. There isn’t a single button Government can press to deliver that but I am the first to admit: there’s more we need to do.
And there are two areas I want to single out where you will now see a renewed sense of urgency from Government - a redoubling of our efforts.
One is getting finance flowing to businesses - crucial for growth today.
We’ve already done a significant amount:
Project Merlin: where we secured around £215bn of bank lending for businesses.
Our £20bn national loan guarantee scheme.
Last month I announced a variety of alternative sources of finance so that cash-strapped firms aren’t solely reliant on the big banks.
But the problem is enormous. Too many good British businesses are still telling me they cannot get loans. So I’m determined that we do everything to get the balance right:
Helping the banks recover their strength for the future but not at the cost of lending to good businesses today.
The other area is infrastructure - so roads, rail, broadband, our energy networks. Investments that underpin a stronger economy for the years ahead while creating the jobs that young people need now.
Again, we’ve taken some big steps; prioritising major projects and setting up the world’s first national green investment bank to give you just a few examples.
But this part of our economy was neglected for years and more will need to be done to secure the levels of private investment necessary to get UK infrastructure up to scratch.
So this is where I want Whitehall directing its energies, getting projects delivered as well as scouring every possible source of private funding - leaving no stone unturned. I hope that gives you a sense of our priorities. Think of today as a kind of statement of intent.
Two years in and building the new economy remains the Coalition’s biggest challenge and while the deficit is part of that - it is only a means to an end. This Government is galvanised around growth. We owe it to the next generation to get it right.