In a speech this morning David Cameron will unveil the Conservatives’ "economic recovery plan". He will say that we need action to address the multitude of gathering economic problems. Interviewed at 7.50am on the Today programme, he emphasised:
- Tory plans to help first-time buyers as helpful to the housing market;
- The new Fair Fuel Stabiliser to help tackle the cost of living; and
- Urgent action to improve depositor protection, ideally before Parliament begins its long recess.
Capturing most attention this morning, however, is his idea to introduce some form of US-style insolvency rules that would give struggling companies a "stay of execution". This morning’s FT looks at what such a "Chapter 11" system might give to businesses:
- "an “automatic stay of enforcement” of debt by creditors, granted for a renewable period of a few months, while management stays and tries to negotiate a restructuring;
- priority funding for distressed companies, to whom lenders could give money in exchange for “super priority” over other unsecured creditors; and
- binding measures agreed by court and a majority of creditors to stop “unscrupulous” creditors from vetoing desirable restructurings."
During the Today programme interview he was pressed on whether he would stick to Labour’s spending plans. He said that 2% annual growth was already "very tough". If spending restraint had been carried out in the good economic times we could now afford to cut taxes, he continued, to boost the economy but Labour had left the "cupboard bare". Asked if taxes might yet have to rise, he replied "I hope that won’t be the case".
George Osborne, Shadow Chancellor, will address the Centre for Policy Studies this evening and will say that Tory economic and social policy are different sides of the same coin. Unless we fix Britain’s broken society and reduce the demands on government, we will struggle to produce a competitive state.
10.30am: Full Cameron speech (PDF)