Davis joins Miliband with warning on growth

David Davies today warns that David Cameron and the Conservative party that he must develop a growth strategy. It follows Ed Miliband's call yesterday for a focus on growth.

David Davis today warns David Cameron and George Osborne that the Conservative party must develop a growth strategy. The warning follows Ed Miliband’s own call yesterday for a focus on growth as he clarified Labour’s position on deficit reduction yesterday.

The Daily Mail reports that David Davis will use a speech later today to say:

“We cannot be defined by a purely cuts agenda. If the only message the public takes away from the events of the next few months is one of retrenchment and loss of services, politically at least, we will have failed.

“We need to rediscover the case for growth — and make it loud and clear across the land. The Thatcher Government of the Eighties was demonised for simply restraining the growth in spending. This one will face even more ­hysterical opposition.

“We have to get the structural ­deficit down and eradicate it or the country will be crippled. But we have to allow the private sector to take off as well. There has to be a growth agenda.”

By contrast, David Cameron sees deficit reduction as his pathway to growth. He has used  speech after speech to say that “Dealing with this deficit is not an alternative to economic growth – the two go hand in hand.”

Labour’s new leader, Ed Miliband, pre-empted David Davies recommendation yesterday when he said:

“The starting point for a responsible plan is to halve the deficit over 4 years, but growth is our priority and we must remain vigilant against a downturn.

“You see when you cancel thousands of new school buildings at a stroke, it isn’t just bad for our kids, it’s bad for construction companies at a time when their order books are empty. It’s not responsible, it’s irresponsible. When you deprive Sheffield Forgemasters of a loan, a loan from government which would be paid back, you deprive Britain of the ability to lead the world in new technology. It’s not responsible, it’s irresponsible.

“And when you reduce your economic policy simply to deficit reduction alone you leave Britain without a plan for growth. It’s not responsible, it’s irresponsible and we should say so. No plan for growth means no credible plan for deficit reduction.”

But although Miliband and Davis agree on the need for growth, they diverge on methodology. Davies wants a low-tax economy with a reversal of the increases in capital gains tax and the 50p rate of income tax.

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