Speaking to the BBC in Birmingham, Deputy PM Nick Clegg voiced his concerns over the state of the economy in the UK amidst controversy over the austerity programme which opponents say is leaving little room for economic growth. In his words, the problems are “very serious” and government won’t budge from the path it has taken.
Clegg also told the BBC that the UK is what he calls an open economy and as such is dependent upon whatever is happening around them. In particular, he indicated that the eurozone is a key factor. He noted that more than 40% of Britain’s exports are sent to the eurozone which is why the current crisis in that region is affecting the UK to the degree that it is.
The interview with the BBC took place in Birmingham where the Liberal Democrats were holding their annual conference. Whilst the opposition Labour party along with trade unions are calling for the austerity programme to be relaxed, Clegg told BBC that government will not budge from its plans.
According to Clegg, straying from the programme in an effort to “balance the books” would create pandemonium and that there would be panic in the market, increased levels of unemployment and of course, higher interest rates.
One of the planned programmes in which government intends to stimulate the economy is in its infrastructure projects which government says will create jobs. The plan will make available £500 million to developers who saw their projects put on hold because of problems with cash flow. This news was given by Danny Alexander, Treasury minister on the same day Clegg spoke with the BBC.
Because the funding being contributed to the infrastructure programme would be taken from other areas of government where funds are going unspent and will need to be paid back, government claims this will remain within their austerity spending plans.
