The coalition government will be sticking to “Plan A” to reduce the UK’s debt, despite slowing growth and growing unemployment, David Cameron has said. Instead, the government will focus on infrastructure investment and “credit easing” in order to restart the economy.
Writing in the Financial Times on Monday, the prime minister said that the government’s plan to reduce Britain’s budget deficit is the reason that the country has kept its credit rating is still able to borrow at sustainable rates from the international market, unlike Spain or Italy.
“This confidence has been hard-won; and it can be easily lost,” he wrote, warning that any slippage in the government’s plan would risk a downgrade from the ratings agencies. "Businesses, investors and families all over the country can rest assured that we will not falter. We will stay the course."
Cameron said that cutting corporation tax, reforming the welfare system and raising the retirement age would improve the UK’s competitiveness. He also promised that the chancellor’s autumn statement would shed more light on so-called “credit easing” for small and medium-sized businesses.
Nick Clegg is expected to announce the recipients of £950m in funding from the regional growth fund today.
Infrastructure will also be given a major new focus, Cameron wrote, saying that "In terms of future productivity, [the] infrastructure deficit is as serious as our budget deficit."
The government has given approval for two power stations projects in Yorkshire they expect to create 1,000 jobs in construction.
Cameron will also be using the upcoming G20 meeting to explore ways to improve the UK’s trade relations with emerging powers, he said, bemoaning the country’s trade imbalance with China in particuarl.
"I passionately believe that the global economy is presenting us with opportunities, not threats – and we must seize them," he wrote.