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Cameron issues warning on recovery

Published 28/04/2015

David Cameron pledged to fight the election campaign
David Cameron pledged to fight the election campaign "with every ounce of energy in my body"

David Cameron has warned voters not to take Britain's economic recovery for granted when they go to the polls on May 7, as official figures showed the pace of growth slowing to its lowest rate for more than two years.

Labour said the worse-than-expected figures from the Office for National Statistics (ONS) showed the Government's plan to "fix" the economy had failed and that a new direction was needed.

But with nine days to polling, the Prime Minister insisted the slowdown underlined the need to stick to the existing strategy, warning a Labour government would bring the economy "juddering to a halt".

The row erupted as the independent Institute for Fiscal Studies (IFS) warned that household incomes faced a further squeeze over the next five years whichever party was in power.

In its latest analysis of the parties' spending plans, the IFS rebuked the Tories, Labour and the Liberal Democrats for their "lack of willingness" to be clear about the details of their proposals.

The last major set of economic data from the ONS to be released before polling day showed GDP grew by just 0.3% in the first three months of the year - half the rate of growth achieved in the preceding quarter and the weakest since the final quarter of 2012.

On a campaign event in Cardiff, Labour leader Ed Miliband said the figures showed there were still "big problems" in the economy.

"While this Government has been trying to run a victory lap, they have been leaving the British people behind," he said.

"What these figures illustrate is that, far from the economy being fixed, they are further proof that there are big problems in our economy, big problems which are leading to the cost-of-living crisis that so many families are facing.

"That's why we need a better plan, a better plan that puts working people first again in our country."

But on a campaign visit to a factory in north London, Mr Cameron said they underlined why the country could not afford to vote for the "instability" a Labour government led by Mr Miliband would bring.

"They show that we cannot take recovery for granted, we can't take our growth for granted," he said.

"All of this, in my view, is at risk in nine days time. With me you know what you get, you keep the plan, you keep the growth, you keep the jobs, you keep the security. With him what are you going to get?" he said.

"If he goes on a borrowing spree interest rates will go up and that will hit businesses, that will hit families. If he goes on a spending spree taxes will go up, that will hit businesses, that will hit families.

"If he goes on a regulation spree that will stop investment - that could bring our economy to a juddering halt."

Earlier Lib Dem leader Nick Clegg set out his latest "red line" demand to the Conservatives and Labour for an emergency budget within 50 days of the election if they want a coalition deal with his party.

He made clear that he would effectively veto Tory plans to cut £12 billion from the welfare budget and impose a timetable on Labour to deal with the deficit.

"Whether we are in government with Labour or the Conservatives, we will pin them down within weeks of the election and force them to put their cards on the table," he said.

"We will have a stability budget, to take place within 50 days of election day, a pre-condition of any coalition arrangement. There will be no deal if there is no stability."

However shadow chancellor Ed Balls dismissed his "red line" warning on deficit reduction, insisting a Labour government would not speed up the pace of cuts in order to meet the Lib Dems' demands.

"What we are not going to do is sign up to faster plans which would end up meaning huge cuts to police or defence or our public services," he told BBC News.

In its latest analysis of the parties' spending plans, the IFS warned that average household incomes were set to fall over the next five years, regardless of who was in power.

It said that while the Tories would cut taxes they would also cut benefits, Labour would protect benefit spending but increase taxes to pay for it and the Lib Dems would plot a middle course between the two.

"With significant deficit reduction still to come, households can expect the tax and benefit changes implemented over the next parliament to reduce their incomes, on average.

"There are large differences between the Conservatives, Labour and the Liberal Democrats in how they propose to do this.

"But they share a lack of willingness to be clear about the details and an inability to resist the urge for piecemeal changes which would make the overall system less efficient and coherent."

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