PRIME Minister David Cameron has said his government will “redouble all our efforts” to turn around the UK economy in the face of a fresh recession and “a very long and painful process” to fix the Eurozone.
Cameron said last week’s confirmation of a double dip recession in Britain was “very disappointing”.
He said: “What’s actually happening in our economy is a very difficult, very painstaking process of rebalancing our economy because the old model of growth – all about financial services, all about the south of England, all about debt in our banks and houses and government – that model is broken,” he told the BBC’s Andrew Marr show.
Cameron was very bearish on the prospects for the Eurozone, saying he did not think the single currency bloc was “anywhere near halfway through” the crisis.
But he said he will not “throw away” plans to cut public spending.
Shadow chancellor Ed Balls warned that last week’s figures highlighted the risks of a “lost decade” for the British economy, made worse by the coalition’s cuts.
“Right now the government must come forward with a plan for jobs and growth to get the economy moving, a cut in VAT, bring forward infrastructure projects, repeat the bank bonus tax for youth jobs, a cut for small firms taking on new workers, a VAT cut to help small businesses doing repairs and maintenance,” Balls said.
Away from the economy, the Prime Minister appeared to take a harder line on culture secretary Jeremy Hunt, who is under fire for his department’s close contact with News Corp while the media group was trying to take full control of BSkyB.
While deferring to the ongoing Leveson inquiry into media ethics, Cameron said Hunt could be forced to resign if he is shown to have misled parliament.
“As things stand, I don’t believe Jeremy Hunt breached the ministerial code. If evidence comes out through this exhaustive inquiry where you’re giving evidence under oath, if he did breach the ministerial code then clearly that’s a different issue and I would act... I’m not trying to duck any of my responsibilities.”
He insisted, however, that he had never made a “grand deal” with Murdoch to smooth News Corp’s path in exchange for political support.