David Cameron today identified immigration as being partly responsible for the economic crisis gripping the country.
The Prime Minister said ‘unsustainable levels of public spending and immigration’ were among the problems inherited by the Coalition when they won the keys to Downing Street.
In a speech today to some of the world’s most powerful business leaders and politicians at the World Economic Forum in Davos, Switzerland, he lambasted the previous Labour government, saying: ‘Remember what we started with in the UK: an economy built on the worst deficit, the most leveraged banks, the most indebted households, the biggest housing boom and unsustainable levels of public spending and immigration.’
The issue of immigration has long been fraught for all sides of the political divide.
During the election, Gordon Brown made what was seen by many as his biggest campaign error when he dismissed the concerns of Labour voter Gillian Duffy – who had confronted him in Rochdale on the issue of immigration – as a ‘bigoted woman’.
The Government has introduced an immigration cap, which limits the number of workers who can come to the UK from outside the EU each year.
It was a key Conservative manifesto commitment designed to address public concern over Labour’s controversial open borders policy. But business leaders, and some Liberal Democrat ministers, fear it could harm the economy.
This time last year, Nick Clegg said the Conservative’s plans to introduce a cap completely ignored parts of Britain where ‘some industries were crying out for people’.
He called instead for an Australia-style area-based immigration policy, which would tie an immigrant worker to a particular part of Britain, and would not allow them to work in a more congested part of the nation.
Even Boris Johnson, the Conservative London Mayor, criticised the cap with a warning that key firms were becoming increasingly ‘hacked off’ with the restrictions on overseas workers.
The planned measure will limit the annual number of economic migrants from outside the EU to 21,700 from April.
Ministers insist they are committed to cutting net migration from its current level of 215,000 to less than 100,000 by 2015.
Earlier this month it emerged that Britain accepts more non-European immigrants than any other EU country except Spain.
In his speech today, Mr Cameron addressed a range of economic issues, saying the road towards recovery was ‘always going to be choppy’, but Britain needs to ‘stick to the course’ if it wants to come through.
He said 2011 is the ‘make or break’ year for economic recovery – and we are facing an ‘immense’ challenge.
Mr Cameron said stress tests for banks must be more stringent, and described 2011 as a ‘make or break year’.
He said: ‘This week we had disappointing growth estimates back home. Yes, they were partly driven by the terrible weather which shut down airports, factories and schools – but let’s be frank.
‘They also brought home something we have said for months: given the traumas of recent years, the recovery was always going to be choppy.’
Mr Cameron said it was ‘not going to be easy’ to re-invigorate the economy but to do so Europe ‘needed to change direction’, saying ‘huge deficits don’t just fall out of the sky’.
He added: ‘To get there isn’t easy. We can’t just flick on the switch of government spending or pump the bubble back up.
‘Making this transformation – and it is a transformation – requires painstaking work and it takes time.
‘It involves paying down billions of pounds of debt. New plants and factories need to be built, new products designed, new innovations taken to market, new businesses nurtured.
‘It’s going to be tough – but we must see it through. The scale of the task is immense, so we need to be bold in order to build this economy of the future.
‘The British people know these things. They understand there are no short cuts to a better future.
‘And already we’re making progress. Not long ago we were heading towards the danger zone where markets start to question your credibility.
‘Yet in the past eight months we’ve seen our credit rating – which was on the brink of being downgraded – affirmed at the triple A level.
‘We’ve seen market interest rates – which were in danger of spiralling – actually fall. All this has happened not in spite of our plan to cut the deficit, but because of it.
‘That’s why we must stick to the course we have set out.’
The Prime Minister added: ‘The world doesn’t owe us a living. So let’s make the choice to do things differently, to fight for our prosperity.
‘If we set our sights high, if we take bold decisions in deregulation, on opening up the single market, on innovation and on trade then together we can defy the pessimists and together recover our dynamism.’
However, Mr Cameron stopped short of setting a timeframe for the recovery of the UK’s economy, following this week’s figures which showed it shrank by 0.5 per cent in the last quarter.
Mr Cameron said he could not ‘deny what a difficult position’ Europe was in as its share of world output was projected to fall by nearly a third in the next 20 years.
No one was ‘immune’ from the current crisis, he said, but that did not mean he signed up to the ‘pessimists’ charter’ that Europe could not compete with the ‘juggernaut’ economies in Brazil, China and India.
But Europe needed to do more to ‘incentivise the same kind of risk-taking investment culture’ as the US if it wanted to ensure its place as the world’s capital for industrial design.
He said that while authoritarian capitalism had its supporters, the best ideas came from open and liberal economies.
Mr Cameron urged Europe and the US to have confidence in their ‘liberal democratic’ style of capitalism in contrast with ‘authoritarian’ systems elsewhere.
He did not refer to any countries in particular, but his remarks about ‘authoritarian capitalism’ are bound to be taken as a reference to places including China.
‘The value of liberal democracy used to be sacred in the West.
‘Now some people are doubting it. They’ve seen authoritarian capitalism and the way it works,’ he said.
‘They see political leaders with the powers of juggernauts, forcing decisions through and they argue that against this, our liberal democratic values look outdated, ineffective – even an obstacle to success.’
The Prime Minister’s spokesman said he was not talking about specific countries but ‘contrasting different models’.
‘He’s not singled out any particular countries,’ the spokesman said.
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