PM warns against early withdrawal of stimulus measures

| November 23, 2009 | 0 Comments
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Speaking today at the annual conference of the Confederation of British Industry (CBI), Prime Minister Gordon Brown told business leaders that in order to sustain economic recovery, financial stimulus measures will be kept in place for as long as necessary.

The PM warned that economic recovery would be put at risk if official support was withdrawn too early.

“Choking off the recovery too soon would be fatal,” said Mr Brown.

His comments echo those mentioned at the recent meeting of G20 finance ministers at St Andrews in Fife.

Finance ministers from developing and rich countries vowed to keep fiscal measures in place until global recovery is assured.

The CBI conference is being held at the Hilton on Park Lane, London and other party leaders: David Cameron, leader of the Conservatives and Nick Clegg, the Liberal Democrat leader, all took to the stage in the build-up to the next election, outlining their measures to sustain economic recovery.

Mr Cameron emphasised the importance of controlling the public deficit. He said “tackling the deficit is not an alternative to economic growth - it is part of the solution”.

According to the Conservative leader, if this is not dealt with, it would jeopardise Britain’s creditworthiness.

“That’s the greatest single risk to sustained economic recovery. It threatens higher interest rates. Lower investment. Higher unemployment. A recovery stopped in its tracks. Even the risk of tipping back into recession,” said Mr Cameron.

With regard to unemployment, Gordon Brown highlighted the fact that the UK has managed to keep unemployment down - at less than 8%.

“The British labour market is more flexible than in the Continent and we have as a result had a faster flow of people from unemployment and into jobs than anything we’ve managed to achieve in any previous recession”, said the PM.

Meanwhile, Nick Clegg stressed the need for more competition in the banking sector as well as the importance of breaking up investment and retail banks.

Mr Clegg proposes introducing a temporary 10% tax on banks but was quick to point out that it is “a tax switch and not tax rise”. He believes there is a need for a wholesale shake-up of the tax system to benefit “ordinary working people”.

Other plans outlined by Gordon Brown included faster broadband by 2012 with the PM pledging that the UK will lead the world in this area.

He also said in order for the country to achieve its low-carbon aims, nuclear energy capacity needs to be increased.

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