Cameron Says U.K. Recovery Is Taking Longer, on Track

Prime Minister David Cameron
Prime Minister David Cameron said, “Of course I can’t tell you that all is well, but I can say this: Britain is on the right track.” Photographer: Andrew Yates/AFP/Getty Images

Prime Minister David Cameron said Britain’s economic recovery is taking longer than anticipated, seeking to reassure voters that austerity measures are working, as his opponents called for an easing of government cuts.

In the keynote speech closing his Conservative Party’s annual conference today, Cameron cited his “duty” to see Britain out of recession and made what he called a “serious argument” for pursuing his deficit-reduction strategy as polls show wavering support for the premier.

“Now I know you are asking whether the plan is working,” Cameron told delegates in Birmingham, central England. “And here’s the truth: the damage was worse than we thought, and it’s taking longer than we hoped. Yes, it’s worse than we thought, yes, it’s taking longer, but we are making progress.”

Cameron is seeking to focus the nation’s attention on his attempts to rebalance the economy away from a reliance on financial services and the public sector, pushing private-sector growth to emerge from a double-dip recession. He praised “doers” -- young, aspirational workers who want their own house or car.

“For us Conservatives, this is not just an economic mission -- it’s also a moral one,” Cameron said. “It’s not just about growth and GDP, it’s what’s always made our hearts beat faster -- aspiration; people rising from the bottom to the top.”

IMF Warning

Cameron spoke the day after the International Monetary Fund cut its U.K. economic outlook, predicting the economy will shrink 0.4 percent this year, and warning the Bank of England may need to expand its stimulus. Opposition Labour Party leader Ed Miliband last week blamed the recession on Cameron’s policies, saying his austerity program had stifled growth.

“Of course I can’t tell you that all is well, but I can say this: Britain is on the right track,” Cameron said.

The prime minister rejected calls from Labour to alter course and adopt a “Plan B,” with slower spending cuts and deficit-funded stimulus.

“If we did what Labour want, and watered down our plans, the risk is that the people we borrow money from would start to question our ability and resolve to pay off our debts,” the prime minister said. “Some may actually refuse to lend us that money. Others would only lend it to us at higher interest rates. That would hurt the economy and hit people hard.”

‘Endless’ Talk

Cameron said the U.K. faces a choice between increasing its productivity or falling behind other countries, warning voters it’s time to “sink or swim, do or decline.” He criticized the European Union for its “endless” discussion about bailing out the Greek economy, when fast-growing developing economies such as China are “creating a new economy the size of Greece every three months.”

“What do the countries on the rise have in common?” Cameron said. “They are lean, fit, obsessed with enterprise, spending money on the future -- on education, incredible infrastructure and technology. And what do the countries on the slide have in common? They’re fat, sclerotic, over-regulated, spending money on unaffordable welfare systems, huge pension bills, unreformed public services. I am not going to stand here as prime minister and allow this country to join the slide.”

Cameron’s address was partly a response to Miliband’s own party-conference speech in Manchester a week ago, when he argued he was a “one nation” politician who spoke for the whole country. Cameron used the same phrase, first coined by 19th-century Conservative Prime Minister Benjamin Disraeli, without directly mentioning him.

‘Class War’

“We don’t preach about one nation but practice class war,” Cameron said, in an attack on Miliband, whom he dubbed an “intellectual,” a word sometimes used derogatorily in the U.K.

“We just get behind people who want to get on in life; the doers, the risk-takers. They call us the party of the better-off. No, we are the party of the want-to-be-better-off, those who strive to make a better life for themselves and their families - - and we should never, ever be ashamed of saying so.”

Criticizing Labour’s economic strategy, the premier said, “whatever the day, whatever the question, whatever the weather it’s: borrow more money,” Cameron said. “Borrow, borrow, borrow. Labour: the party of one notion: more borrowing.”

Churchill Comparison

The prime minister’s appearance was preceded by an address by the mayor of New York, Michael R. Bloomberg, the political independent and founder and majority owner of Bloomberg News parent Bloomberg LP, who likened Cameron’s approach to government to that of Britain’s World War II leader, Winston Churchill.

Like Miliband, who frequently refers to his father’s experience as a Jewish refugee fleeing the Nazis, Cameron talked about his dad, Ian, who died in 2010, months after the prime minister took office.

Ian Cameron was born with stunted legs, which he later lost. “But Dad was the eternal optimist,” Cameron said, explaining that he’d taken pride in “working hard from the moment he left school and providing a good start in life for his family. Work hard. Family comes first. But put back into the community too.”

Cameron also referred to his severely disabled son, Ivan, who died in 2009, during a passage about this summer’s London Paralympic Games. “I always thought that some people saw the wheelchair, not the boy,” the prime minister said. “Today more people would see the boy and not the wheelchair.”

‘Spread’ Privilege

Cameron echoed Miliband in saying his party is there to represent the whole country. “The Conservative Party is for everyone: north or south, black or white, straight or gay,” he said. ‘I’m not here to defend privilege, I’m here to spread it.”

The National Institute of Economic and Social Research offered Cameron some good news yesterday, saying the U.K. economy grew at its fastest pace in five years in the third quarter after a rebound from one-time disruptions in the previous three months.

Gross domestic product rose 0.8 percent, compared with 0.1 percent in the quarter through August, Niesr, whose clients include the Bank of England, said in London. That’s the fastest expansion for a calendar quarter since the third quarter of 2007. Official data showed the economy shrank 0.4 percent in the three months through June.

Cameron said a strong private sector, welfare cuts and schools would form the “battle-lines for the next election” due in 2015.

“Let’s build an aspiration nation,” he said. “Let’s get Britain on the rise. Deficit, paid down. Tough decisions, taken. Growth, fired up. Aspiration, backed all the way.”

(Corrects 16th paragraph to show that New York’s mayor is a political independent.)
Before it's here, it's on the Bloomberg Terminal. LEARN MORE