Prime Minister and Deputy Prime Minister economy speech

David Cameron: "Our job is to build a recovery on real growth and investment - not debt."

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
The Rt Hon David Cameron

The Prime Minister and Deputy Prime Minister are visiting a business in Essex today to talk about the economy.

The Prime Minister is expected to say:

Two years ago our two parties came together to form a strong Coalition. We agreed that our number one priority was to keep Britain safe from the financial storm and to rescue our economy.

That was and remains our guiding task and in these perilous times it’s more important than ever for Britain that we stick to it. I don’t hide from the scale of that challenge - or from the message sent by voters in many places in last week’s elections. I’m listening. I’m leading. I get it.  There are no closed minds, no closed doors in Downing Street.  
“So here is the unvarnished truth. The damage done by the crisis was greater than anyone thought. The first quarter growth figures have shown a tough task getting even tougher.
“Abroad, the Eurozone remains in extreme trouble and is in recession. Oil prices are making life difficult for families around the world. At home, we inherited an economy built on the sands of debt, not on the rock of sustainable investment.
“We set out to change that and we are doing so. This means two things.
“First, getting our deficit under control. Yes, this means we have had to take tough decisions. The task is long and hard. You can’t borrow your way out of a debt crisis. We can’t burden our children with the costs of paying today’s bills tomorrow.
“Britain’s deficit was the biggest of any major economy on the planet and despite two years of firm action, it is still almost as big as a share of GDP as Greece’s.

But we are making progress: under this government the deficit is falling and public sector net borrowing is down. This allowed the Bank of England to keep interest rates at 0.5 per cent. That means real security for people, right now. There can be no going back on our carefully judged strategy for restoring the public finances.  
“That brings me to the second part of our answer. Our job is to build a recovery on real growth and investment - not debt.
“To build a balanced economy, in which all the sectors - business, retail, manufacturing - play a part.
“A diversified economy, across all sectors and regions, not one that is overly reliant on financial services and the City of London.
“Because our solution is not just about deficit reduction. It’s about getting the banks lending. It’s about creating the most competitive business tax regime in the developed world.
“It’s about helping small businesses and freeing them from the mass of unnecessary bureaucracy that too often stifles enterprise and entrepreneurship. It’s about helping people onto the housing ladder, and reforming the planning system to allow for much needed new development.
“It’s about supporting business investment, whether through the Regional Growth Fund, the Growing Places Fund, the Enterprise Zones or the world’s first Green Investment Bank. It’s about cutting income tax for hard working, hard pressed families and taking two million low paid workers out of tax altogether.
“It’s about reforming and simplifying our benefits system to ensure that work really does pay. It’s about helping people back into the labour market by offering apprenticeships, work experience opportunities and wage subsidies, all part of the Work Programme and the Youth Contract.
“It’s about investing in skills, driving up standards in our schools, creating academies, Free Schools and our new University Technical Colleges. It’s about all these things and more.
“I know that the task of getting driving our economy forward when faced with the headwinds that are blowing in from the Eurozone is a formidable one.
“But the Government is determined to do whatever needs doing to succeed.
“We’ve got to sort out our debts…get real growth…and change this country so that once again it rewards people who work hard, want to get on and play by the rules.
“And that’s what I am here to do.”

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.”

Published 8 May 2012