Last updated: May 7, 2012 11:55 pm

Cameron vows ‘no going back’ on deficit

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David Cameron will invoke Margaret Thatcher’s “not for turning” rhetoric on Tuesday, promising the coalition will stick to its “long and hard” deficit reduction programme in spite of the electoral backlash against austerity in France and Greece.

In a joint appearance in Essex with Nick Clegg, his Lib Dem deputy, Mr Cameron will say that sorting out the nation’s finances remains the coalition’s “guiding task” even though it involves tough decisions.

“There can be no going back on our carefully judged strategy for restoring the public finances,” he will say. “I don’t hide from the scale of that challenge.”

The comments are in the same vein as those made by Margaret Thatcher in 1980, as unemployment rose sharply one year into her premiership.

Mr Cameron will admit the “unvarnished truth” that the British economy is in worse shape than expected due to the credit crunch, rising oil prices and eurozone “headwinds”.

The prime minister is under pressure after Britain lurched back into double-dip recession in the first quarter of the year. His party lost 405 seats in last week’s local elections and some Tory backbenchers want him to tack to the right.

Mr Cameron and Mr Clegg are renewing their coalition “vows” on a visit to an Essex business, a more gritty venue than their cosy appearance in the Downing St rose garden in May 2010.

The Lib Dem leader will echo the prime minister by describing the need to cut Britain’s debts as a “clear moral responsibility”.

Mr Clegg will deny the coalition is making cuts out of any ideological obsession with shrinking the state. Even by the end of the parliament, state spending will amount to about 42 per cent of GDP, a higher proportion than under most of New Labour.

Both leaders will reject the idea that the coalition is neglecting economic growth, promising to force the banks to lend, help small businesses, reform the planning system and invest in infrastructure.

The joint appearance comes ahead of the Queen’s Speech on Wednesday, when the coalition will set out its priorities for the next parliamentary session, including bank regulation, a Green Investment Bank, and reform of the House of Lords.

Ed Miliband, Labour leader, will avoid a direct attack on the deficit reduction programme when he speaks at a rival event, also in Essex. Instead he will direct his fire at “a recession made in Downing Street”, rising unemployment, the higher cost of living and the cut in the 50p tax rate.

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