Cameron slammed the Government’s economic policy ahead of the pre-Budget report today, forecasting that the gap between tax revenue and spending will be £80bn this year rising to over £100bn next year – the equivalent of £4,000 per household.
He argued that domestic policy has led to Britain facing “a deeper and longer downturn than any other industrialised nation”.
He said the combination of the highest personal debt of any country in the world, the largest budget deficit in the developed world and an economy overly dependent on housing and financial services have left Britain entering the recession as “one of the most unbalanced economies in the world”.
He called for “monetary activism” to stem the crisis – meaning low interest rates, Government guarantees on lending and granting the Bank of England he power to stop irresponsible lending by banks in the future.
Cameron said: “It’s time to construct an economy that is genuinely built to last. In the immediate term, that means being radical in monetary policy so we get credit moving to wealth-creators like yourselves.
“But in the long-term, we need to learn three lessons.
“That we can never enter a downturn with such a massive deficit – so we need fiscal responsibility, bolstered by independent oversight.
“That we never become so indebted as a country again – so we need financial responsibility, bolstered by a renewed role for the Bank of England.
“And that we never become so reliant on just a few sectors for growth – so we need a responsible attitude to economic development, bolstered by a government that provides the infrastructure our businesses need.”