Cameron Says Strengthening Economy May Allow UK to Lower Taxes – Bloomberg

U.K. Prime Minister David Cameron
said the British economy is “healing” and that the improvement
should allow the government to lower taxes.

“As we start to see the economy grow stronger — and it is
growing stronger — as we start to see the country improve,
actually I want to give people back some of their hard-earned
money and try to reduce their taxes,” Cameron said in an
interview on the BBC’s “Andrew Marr Show” broadcast yesterday.
“Your economy does better if you say to people you’ve worked
hard, you’ve done the right thing, here is some of your own
money back in a tax reduction.”

With recent data showing strength in the economy, Cameron
may find it easier to achieve his deficit-reduction goals as
part of the biggest fiscal squeeze since World War II. Due to a
weaker-than-expected recovery after the global financial crisis,
Cameron’s Conservatives and their Liberal Democrat coalition
partners have had to extend budget cuts until 2017-18, beyond
the country’s next general election in 2015.

The government’s fiscal plans show “further need for
spending reductions in order to meet our deficit targets” and
“don’t include any plans for tax rises,” Cameron said.

The U.K. public has “set us this task of trying to turn
the country round, sort out the deficit, get the economy moving
again, build a country where hardworking people get rewarded,”
Cameron said. “They’ll judge us in 2015 and I hope to persuade
them that a Conservative-only government will be able to do even
more of that.”

Gaining Momentum

After returning to growth in the first quarter, Britain’s
economy has shown some signs of gaining momentum. Measures of
services, manufacturing and construction all improved in June
and recent reports have suggested rising house prices and
falling unemployment are spurring consumer confidence.

Data this week will probably show gross domestic product
rose 0.6 percent in the second quarter, the most since 2012,
compared with 0.3 percent in the previous three months,
according to the median of 37 economist forecasts in a Bloomberg
News survey. The Office for National Statistics will publish the
data, a first estimate, on July 25.

Cameron and Chancellor of the Exchequer George Osborne are
counting on the economy gaining ground to boost support for the
Conservative Party, also known as the Tories, which is trailing
behind the opposition Labour Party in opinion polls.

‘Worse Off’

Cameron’s economic strategy hasn’t worked and Labour would
raise the threshold at which people begin paying income tax,
paid for by a mansion levy on the wealthiest, said lawmaker
Catherine McKinnell, a spokeswoman for the opposition on
Treasury issues.

“The Tories have given millionaires a huge tax cut, but
their decisions have made people on middle and low incomes worse
off,” McKinnell said in an e-mailed statement yesterday. “The
reason why there’s still going to be a big deficit after the
next election is this government’s economic failure. That’s why
the government should be acting now to secure the recovery and
help families struggling with the cost-of-living crisis.”

Cameron should break up the coalition next year so the
Conservatives can campaign more clearly as a separate political
party in the run-up to the general election, the Sunday
Telegraph yesterday cited Conservative lawmakers Graham Brady
and Bernard Jenkin as saying.

“I want to govern as a Conservative-only government,”
Cameron said yesterday. “I’m aiming for victory and I’m going
to fight all-out for victory, and I think victory is achievable
if we really roll up our sleeves and deliver.”

Child Pornography

The prime minister will give a speech today on tackling
child pornography on the Internet. He said yesterday that
Internet companies need to block the results of searches for
child-abuse images, and that the government will look at
bringing in legal controls should they fail to comply.

“We need to have very, very strong conversations with
those companies about saying ‘no, you shouldn’t provide results
for some terms that are so depraved and disgusting,’” Cameron
said. “If we don’t get what we need we’ll have to look at
legislation.”

On the conflict in Syria, Cameron said the U.K. is sticking
with plans to give only non-lethal support to rebel forces.

“I would accept that we’re on a depressing trajectory and
we need to change that,” he said. “You’ve got an evil
president who’s doing dreadful things to his people, I think he
may be stronger than he was a few months ago, but I’d still
describe the situation as a stalemate.”

EU Ties

Asked about his plans to renegotiate the U.K.’s
relationship with the European Union before a proposed
referendum in 2017 on Britain’s EU membership, Cameron said
yesterday that more specific goals will be set out “over
time.”

He is seeking to repatriate some powers and streamline
decision-making as part of an overhaul of the political bloc.

“I go into these negotiations optimistic and confident
that I can get a better deal for Britain,” he said. “I
wouldn’t be going down this path if I didn’t think it was
possible to get the result I want to achieve.”

Japan told Britain it “expects that the U.K. will maintain
a strong voice and continue to play a major role in the EU,”
the Sunday Times said yesterday, citing a memo to the British
government as part of an official review into the current
arrangement.

To contact the reporter on this story:
Scott Hamilton in London at
shamilton8@bloomberg.net

To contact the editor responsible for this story:
Craig Stirling at
cstirling1@bloomberg.net