PMQs today: David Cameron says it would be the wrong approach to abandon the chancellor's fiscal rule

James Nickerson
Follow James
Members Of The New Coalition Cabinet Arrive For Their First Cabinet Meeting
Cameron reiterated that the UK had rough waters ahead after the Brexit vote (Source: Getty)

It would not be the right approach to abandon the chancellor's fiscal rule in response to tough economic conditions resulting from Brexit, Prime Minister David Cameron has said.

In response to a question from Labour leader Jeremy Corbyn about whether the government is ready to scrap the rule as investors are holding off investment and jobs are under threat, Cameron said: "I don't believe that would be th right approach.

"What business needs to hear, what consumers and investors want to hear, is that we have taken huge steps over the last six years to get the budget deficit down, to make the economy more competitive, to make us an attractive place for investment - they want those things to continue.

Read more: Corbyn is refusing to resign after losing a vote of no confidence among his MPs

"If we do see economic difficulties, one of the ways we have to react to that is to make sure our public finances and our economy stay strong. We shouldn't have taken all the steps of the last six years to get the deficit down in order to see us get onto a more difficult path."

The Prime Minister was speaking after a number of companies suggested investment could be put on hold, jobs could be relocated and ratings agencies downgraded the UK economy after it voted for Brexit.

Speaking during Prime Minister's Questions, Cameron added that the long-term damage to the economy will depend on what kind of trading relationship the UK has with Europe, and that for "his part, I think we want the closest possible relationship in terms of trading with the EU".

Read more: Should we worry about the UK losing its AAA credit rating?

Given Cameron's decision to stand down, Corbyn turned to the PM's legacy, asking if he will leave a "one nation legacy" including the banning of zero hours contracts, cuts to universal credit and scrapping of the bedroom tax.

Cameron said he agreed that more needed to be done to tackle poverty and spread opportunity, but said "to try and pretend last Thursday's vote was a result of the state of the British economy is nonsense. The British economy is stronger than it was six years ago.

"We all have to reflect on our role during the referendum campaign. I know the honourable gentleman says he put his back into it - all I'd say is I'd hate to see him when he's not trying."

Corbyn has come under mounting pressure in recent days after a tsunami of high profile resignations, largely to do with what is seen as his feeble leadership during the EU campaign.

Later on in the sparring, Cameron said if Corbyn was seeking excuses for the Brexit vote, he should look to himself, calling on him to stand down from the Labour leadership.