Cameron U-turn on card debt speech

12:44pm Wednesday 5th October 2011

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David Cameron has been forced into a hasty rewrite of his speech to the Conservative conference after a key passage was interpreted as a call for the nation’s households to pay off their credit card debts.

Early drafts of the speech circulated on Tuesday night indicated that the Prime Minister would say that solving the debt crisis would require “households – all of us – paying off the credit card and store card bills”.

The comment sparked concern among retailers and economists, with the British Retail Consortium warning that urging people to “retrench” was “at odds with promoting growth”.

The Institute for Public Policy Research think-tank said that if consumers took the PM at his word, the UK economy would be “in real trouble”, shrinking significantly over the years to come.

Aides said that Mr Cameron had not intended his words to be seen as a call to action, but to describe a process that was already under way as households seek to manage their finances carefully during tough economic times.

He has rewritten the passage to say that the country has been suffering from a debt crisis and “that’s why households are paying down their credit card and store card bills”.

Mr Cameron’s closing speech to the conference in Manchester is taking place against the backdrop of gloomy economic news, with new figures revising the UK’s growth downwards in both of the first two quarters of 2011.

The PM will use his high-profile address to acknowledge that times are tough, but will insist he has the leadership to guide Britain back to prosperity.

He will recognise that anxious voters cannot yet see signs that his austerity strategy is taking the country out of economic peril. But he will warn that the UK must not become “paralysed by gloom and fear”, calling for a spirit of “can-do optimism” to revive national fortunes.

Labour said the Prime Minister was “rattled by the failure of his austerity plan” and urged him to set out a plan for growth rather than reining in spending.