Prime minister Cameron to stay the course on economy
Prime minister David Cameron has delivered a speech in which he vowed that the government will not make u-turns on its economic policies.
Britain needs to see a rise in gross domestic product over the first three months of 2013 to avoid going into an unprecedented triple-dip recession and the country recently saw its AAA credit rating downgraded to AA1 by Moody's, but Mr Cameron argued these are not reasons to alter course.
He acknowledged that times are hard and that "families are struggling with the bills at the end of the month .… some are just a pay cheque away from going into the red."
However, he argued, it is wrong to suggest that the best way forward is to adopt Labour's policy of spending and borrowing more, citing an Institute of Fiscal Studies analysis that to adopt such a plan would mean borrowing an extra £200 billion.
Mr Cameron said deficit reduction was one of three key areas where the economy needed to improve, with the others being the reform of the banking system and an increase in competitiveness.
He said the last of these was undermined by Labour in office, with 36,000 new regulations being introduced for businesses between 1997 and 2010.
Addressing the downgrade, Mr Cameron quoted the warning by Moody's that it would lower Britain's credit rating further if it reduced its commitment to "fiscal consolidation" as a reason to stick to the task of cutting the structural deficit.
He went on to state that there are signs of some policies bearing fruit, with one example being a rise in exports to emerging economies like Brazil, Russia and China, while noting investments in the future such as the expansion in super-fast Broadband.
Responding on behalf of the opposition, shadow chancellor Ed Balls said many people will "wonder what planet David Cameron is on".
Mr Balls said that while the prime minister is upbeat, "everyone else knows that the economy is flatlining, living standards are falling and the deficit is rising to pay for the costs of economic failure".