Cameron to announce new policies to boost the economy

Monday, 03 September 2012 07:55

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The government has come out fighting on the economy ahead of its return from its long summer break.

The Prime Minister, David Cameron has insisted that the government will introduce direct policies to “cut through the dither” to promote economic growth.

He is set to announce new policies this week to boost business lending, support new housing projects and simplify the planning system.

The Chancellor, George Osborne, said on the BBC’s Andrew Marr show that "This Government means business, we have got that energy, we are determined to do more, to make sure this country can earn its way".

Mr Osborne will reveal details of a new bank to support small businesses, based on German, Irish and American models, which will be backed by the state and focus solely on distributing funds to small businesses.

Initially, it would not compete with retail banks but the Chancellor left open the possibility that the bank could evolve and take on additional powers.

Last week, David Cameron was challenged by one of his own MPs, Tim Yeo, whether he was a “man or a mouse”. In an attempted response today, Mr Cameron says the government will show “fighting spirit” and announce a series of economic measures to help the UK economy emerge from recession.

He says that the government will cut through the “paralysis” that means many potential new housing developments to be held up by local opposition and lengthy planning inquiries.

Mr Cameron said in an interview with the Mail on Sunday: "A familiar cry goes up – 'yes we want more housing, but no to every development – and not in my backyard'."

"Frankly, I am frustrated by the hoops you have to jump through to get anything done – and I come back to Parliament more determined than ever to cut through the dither that holds this country back."

However, his former rival for the party leadership, David Davis has hit back at Mr Cameron’s plans. He says that the government is wrong to focus on individual policy areas and should follow a “radical pro-growth agenda”.

Mr Davis called for the government to force banks to lend, to make extra tax cuts and to encourage school leavers to start their own businesses.

Meanwhile, George Osborne defended the government’s economic direction on the Andrew Marr show this morning.

Mr Marr asked the Chancellor what his alternatives were to his deficit reduction policies and Mr Osborne insisted that "There is no alternative" route to growth.

“Our economy is healing, it is taking time, there is no easy route,” Mr Osborne said.

Mr Marr pointed out to Mr Osborne that he was the most unpopular person in the government to which Mr Osborne responded that given the state of the economy, “it's not surprising I'm not the most popular person in the government.”

Mr Osborne said: "I'm the first person who would like the recovery to be stronger"

The two-pronged initiative by the two top men in the government comes as rumours emerge over a possible cabinet reshuffle. Mr Osborne intimated that there will be no major changes in the Treasury, which means his job is safe for the moment.

Reports suggest two other senior posts will not undergo change. Theresa May is likely to remain as Home Secretary and William Hague as Foreign Secretary.

However, Mr Cameron may oust Baroness Warsi from her position as Conservative party chairman. Another individual dogged by the expenses scandal, David Laws, is tipped to return to the cabinet.

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