PM: We'll Come Through If We Hold Firm
David Cameron has warned critics there is "no magic money tree" and dismissed calls to borrow more to fund Government spending.
The Prime Minister insisted the coalition and the country had no choice but to stick to his economic strategy because to turn back would risk Britain falling into "the abyss".
In a pre-Budget speech, he brushed off a suggestion from Business Secretary Vince Cable that more borrowing could be used to fund capital spending projects.
And he starkly declared that failing to tackle the deficit would push up interest rates, prompt home repossessions and force companies out of business.
"There are some people who think we don't have to take all these tough decisions to deal with our debts," Mr Cameron said.
"They say that our focus on deficit reduction is damaging growth. And what we need to do is to spend more and borrow more.
"It's as if they think there's some magic money tree. Well, let me tell you a plain truth: there isn't."
He added: "Those who think we can afford to slow down the rate of fiscal consolidation by borrowing and spending more are jeopardising the nation's finances, and they are putting at risk the livelihoods of families up and down the country."
The Prime Minister said losing the AAA-credit rating last month had been the "starkest possible reminder" of the country's massive debt problems.
Evoking Margaret Thatcher, he also warned his own party that tax cuts were only possible if they could be funded.
"This month's Budget will be about sticking to the course. Because there is no alternative that will secure our country's future," he said.
Mr Cameron argued there are signs the Government's approach was starting to work, with the deficit cut by a quarter, interest rates down and exports up.
He also pointed to the rise in private sector jobs and businesses, and fall in those on out-of-work benefits.
"The very moment when we're just getting some signs that we can turn our economy round and make our country a success is the very moment to hold firm to the path we have set," he said.
He admitted he would take "another easier way" if one was available but insisted tough decisions now would secure the country's economic future.
"While some would falter and plunge us back into the abyss, we will stick to the course," he vowed.
Mr Cable had earlier ruffled feathers by suggesting things had changed since 2010, when slashing the deficit was put at the heart of Government policy.
He questioned whether the Government should borrow more at the current low rates to finance spending on schools, transport and new houses.
Mr Cameron made clear the article had been cleared by the Treasury, and insisted there was no division.
The senior Lib Dem himself also insisted he was just talking about an approach he has long called "Plan A-plus".
"That is financial discipline and getting down the deficit and at the same time pursuing growth. That's what we are doing and will continue to do," he said.
Nick Clegg, speaking during his LBC radio phone-in, said Mr Cable was not calling for the Government to "borrow pots of money tomorrow".
"He is saying this is where the balance of judgment is. This is where we need to balance the risks," he said.
He also warned against more borrowing because of the risk that it would push up interest rates, echoing Mr Cameron in saying there was no "magic-wand solution".
However, Labour leapt on Mr Cable's comments and insisted more borrowing could kick-start the economy and create jobs.
Shadow Chancellor Ed Balls said: "Britain cannot afford another two years of falling living standards and economic failure.
"If David Cameron and his downgraded Chancellor won't listen to Labour, then it's time they started listening to the IMF, Boris Johnson and now even Vince Cable, who are calling for a change of course."
what do you think?
What plan? They're making a mess of the country and just sitting back and watching whilst the people lose their jobs and suffer
History will cite two emperors who played the fiddle whilst a fire raged Nero was one and David the other. Though history will also that Tony and Gordon lit a fire and did not call the fire brigade. Thirty years of incompetence and statistics manipulation
economics is really easy, you save when times are good so you can spend when times are bad ..doing it the other way around never works, how can he not get that?
Because LABOUR spent all the money They even left a note saying there's no more money
Scott, you walked straight in to that one mate. If Labour had saved during the good times we would be ok now.
Tory propoaganda about saving during the good times and Labour spent all the money. Total distortion of a complex problem simplified to appeal to dummys while having little relevance to the real problems. The reality is we should be prepared to borrow now because interest rates are historically low (everywhere, not just in the UK), as long as we do it sensibly, and so that the international community realise we are doing the right thing and act accordingly. I'd always be prepared to lend to someone with a sensible plan for growth and hence profit. I'd never lend to someone who has no plan except to keep retrenching, which is what this government are doing
No plan that includes job losses would ever go down well,does the country really believe Milliband would be able to do a better job? In opposition you can promise the world with no need to deliver. Just look at the Lib/Dem's made promises they never thought they'd have to keep. When labour win the next election outright or with LD's in coallition, they will spend first 18 months blaming the Tory's for their mess, then get it all wrong themselves. Like a merry-go-round never ending Zzzzzzzzzzz.
Big society = Communism.
We need the bradbury pound NOW!
"PM: We'll Come Through If We Hold Firm" Like a car skidding out of control, good luck and goodnight UK economy.
...and meanwhile, lets send tanks and stuff to Syria!
I listened to some of that speech down the gym and wonder who writes the twaddle Cameron comes out with.ie I like being in a factory where we make things, we should make more things and Briatin will become great again. Then he went onto dragging up why we are in a mess yet again, Cameron do your job and put the country right stop moaning about the past and saying it wasnt mt fault boo Hoo it was the nasty Mr Brown and friends. Absolute tripe
The government either know something we don't or they are not on this planet. When you have debt problem you don't go running round the world handing out money which you have don't have and have to borrow. You don't give money to your potential enemies. You don't borrow money to sustain public services you can't afford. You don't fund breeding when you have a population problem. You don't hire incompetent managers a lot of money to mismanage public services for which you have to borrow money to pay for. You don't allow public servants and politicians to spend public money without a proper check system for authorisation and payment. There are many other things you don't do if you want to get out of debt and recover your finances.
So you have explained what labour did but your trying blame the tories for labours total incompetence
The present government is guilty of all these things. I agree the labour government created the problem but this lot are doing the same things and not solving the problems.
If the plan is to giftwrap Labour the next general election and get beat by UKIP in a number of seats then carry on CallMeDave, you're doing a grand job. You can talk all you like, people living in the real world see their payslips, see their bills and know you're talking utter tosh.
Stop sending billions abroad would help david caMORON will go down in history as the man who finished off england
I thought David Cameron delivered a very inspiring speech. I agree with his sentiments and ideas. The only 'fly in the ointment' I can forsee is if the Bank of England raise interest rates, which is surely an eventuality. Then we are looking at a triple dip inflation. He also conveniently airbrushed over the Immigration problem, especially what will happen in January, 2014, when Bulgaria and Rumania become members of the EU. I suppose he cannot do much about that now other than to hold a Referendum earlier than that promised. However, don't hold your breath.
Inspiring speech my backside he could send a glass eye to sleep. The guy is on his last legs, roll on the next election
What is with the use of words like "we'll" and statements "we are all in it togeather" i dont see the goverment having to make choices of food or heat ect ect all i see is the british people getting robbed more and more and being told there is no money as more and more money gets sent out of the country...
The lack of money immigration EU regulations and foign aid have all been the result good old Labour and Blair tfying to mark out his future in Europe with the rest of the curupt EU leaders
Its like listening to the last throws of a failed football manager no where to go, nothing to say. like the football manager he will get the sack evenually sooner the better or we will be relegated