25 Sep 2012

Alexander: We will not abandon debt plans

Chief Secretary to the Treasury Danny Alexander warns there “could not be a worse time” for the government to abandon its deficit reduction strategy.

Amid growing calls for Chancellor George Osborne to adopt a plan B after the economy fell back into recession, his Liberal Democrat deputy will deliver a staunch defence of his refusal to change course.

In his keynote speech to the Lib Dem autumn conference in Brighton, Mr Alexander will say the coalition’s austerity programme – which Labour blames for the UK’s continued lack of growth – is “the foundation” for future prosperity.

“We have rebuilt the confidence in this nation’s ability to pay its way in the world, we can now put that credibility to work for the British people,” he will say.

“There could not be a worse time to argue that we should abandon our plan. We won’t do it. It is the foundation for everything else. It is the foundation for jobs and prosperity in the future.”

He will say it was the “right, pragmatic” response to worsening growth forecasts for the government to push some spending cuts into the next parliament.

‘Right balance’

Lib Dem Business Secretary Vince Cable said he felt the government had “struck the right balance” with its fiscal discipline, which he continued to support.

But he stressed that the economy must not “get stuck on a downward escalator where slow or no growth means bigger deficits leading to more cuts and even slower growth”.

Mr Alexander will use his speech to reaffirm his commitment to tackling tax avoidance and evasion, saying the government is on track to raise £4bn this year from a £900m investment announced two years ago.

“Fair taxes in tough times means everyone playing by the same rule book, and everyone paying their fair share,” he will say.

“We have this message to the small minority of wealthy people who don’t play by the rules: we are coming to get you and you will pay your fair share.”

Focus on tax havens

The government is to step up its focus on Liechtenstein, with which the last Labour government entered an agreement to claw back lost revenue from British investments in the tax haven.

“We are doubling the size of the team focused on Liechtenstein. With that extra effort we can recover much more from those who think they can hide their money offshore – up to three times more: £3bn,” he will say.

Mr Alexander will also announce that the first government guarantee to support major infrastructure is to be issued to overcome funding difficulties for the purchase of trains for the Crossrail scheme in London.

“It is the biggest infrastructure project in Europe right now. But we need to ensure the rolling stock is delivered on time. Right now, difficulties raising the necessary private funding in the market could delay their delivery,” he will say.