Government will stick to deficit reduction plan, says Danny Alexander

Liberal Democrat minister says Britain’s biggest asset is government with ‘clear plan’ for getting country’s deficit under control The chief secretary to the Treasury, Danny Alexander, has insisted the government will stick to its deficit reduction plan despite a downgrading of the UK economy growth forecast by the International Monetary Fund. The Liberal Democrat minister told BBC Radio 4′s Today programme that Britain’s biggest asset was a government with a “clear plan” for getting the country’s deficit under control. “The message I am taking from what the IMF have said is that we should stick to our plans,” he said. “What we are seeing around the world are doubts about politicians’ ability to stick to their plans and take tough action. We have done that, and it is a prize we shouldn’t sacrifice at all.” Alexander also dismissed reports that some cabinet ministers were calling for an increase in spending of up to £5bn to help boost growth. The Liberal Democrat leader, Nick Clegg, is preparing to use his keynote speech on the closing day of the party conference today to reaffirm the government’s commitment to tackling the deficit, despite critics warning that the cuts programme risks choking off growth. With the IMF’s decision to downgrade the growth forecast heightening fears of a double-dip recession, Clegg will acknowledge that the recovery is “fragile” and warn of a “long, hard road ahead”. But he will say the Liberal Democrats are interested not in doing the “easy thing” but the “right thing”. Alexander quashed reports that cabinet ministers believe the chancellor, George Osborne, could increase capital spending on roads, broadband and other infrastructure projects by up to £5bn in order to stimulate economic growth without abandoning the deficit reduction strategy. The speculation was fuelled after comments by the business secretary, Vince Cable, that the government had to find a way of getting a stimulus going “without compromising the deficit reduction programme”. “There is a flexibility built into the government’s policy,” he said. “It is perhaps not widely understood.” Alexander said he did not recognise the £5bn figure, adding: “At a time when we are seeing real economic problems around the world, real pressure on countries that haven’t set out clear plans to deal with their deficits, we in this country have a major asset, which is a government that has a clear plan which it is sticking to. “So we have set out the spending plans that we have, but we are going to use the money that we have as intelligently as possible.” “We recognise that, as a government, we have to strain every sinew to do things that help support the economy to grow, and capital spending is a very important part of that. “We are engaged in the second phase of our growth review, looking at how we can invest in infrastructure.” A Treasury spokesmandenied that there was any shift in position, saying: “We have our spending plans and we are sticking to them.” Speaking at a fringe meeting on Tuesday, the Liberal Democrat minister, Chris Huhne, said: “We’ve got to be more creative and imaginative about bringing forward more spending.”However, on Wednesday, he said he believed there was “no room” in the budget for such a move. Huhne said there was a “very dangerous” global economic situation following the IMF’s decision to downgrade the UK growth forecast. He called on the Bank of England to pump more cash into the British economy, saying a further round of quantitative easing (QE) would be “sensible” given the “flatness” of growth, but dismissed talk of proposals for a £5bn spending increase. “One of the great achievements of the government has been to get the deficit down and get us out of the danger zone, despite the fact that we have a much bigger budget deficit than a lot of the countries that have been through crises,” he said. “But it’s about getting private spending going, private investment going because we don’t have the room to do that on the budget.” Huhne also backed Clegg’s call for some capital spending projects that have already been approved to be brought forward at an earlier stage. He said: “As Nick was discussing, bringing forward capital projects if we can to accelerate them from plans which might have had them further back in the comprehensive spending review period, bring them forward to help get them going.” Economic policy Danny Alexander Nick Clegg Chris Huhne Liberal Democrat conference 2011 Liberal Democrat conference Liberal-Conservative coalition Tax and spending Liberal Democrats IMF Recession Global economy Economics Hélène Mulholland guardian.co.uk

Posted by on September 21, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.