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Cameron outlines plans for economy
London, May 28 (Agencies):
Published on 28 May. 2010 11:34 PM IST
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David Cameron is outlining plans to “transform” the economy in his first major speech as prime minister. Mr. Cameron , speaking at an event in Yorkshire, will claim the economy has been heading in the wrong direction under Labour for years.
He also said the economy should be rebalanced in favour of manufacturing, business and the private sector.
He told GMTV critics of a planned rise in capital gains tax (CGT) should “calm down a bit and wait for the Budget”.
Some of his own senior Tory MPs have attacked the planned rise on non-business CGT - which could see taxes on the profits of second home and other asset sales more than double to 40% or 50% - as a tax on the middle classes.
But Mr Cameron urged them to wait for the Budget. He told GMTV: “People don’t yet know what our proposals are. Everyone’s getting a bit ahead of themselves on this issue.”
He added: “We have to be calm about this because in a coalition there are inevitably going to be arguments and discussions about tax policy and other policies. And sometimes these will happen much more in the open than in the past.”
On Thursday Lib Dem Business Secretary Vince Cable insisted the coalition government was not split over the planned CGT rise - adding it would help fulfil the Lib Dem aim of bringing more “fairness” to the tax system.
He told the BBC: “It’s very important that we have wealth taxed in the same way as income.”
In his speech on Friday Mr Cameron stressed the need to cut the £156bn deficit and get people back into work.
He said that his government intended to spread economic growth across regions and industries and end the “inevitability” of millions on long-term welfare.
Work and Pensions Secretary Iain Duncan Smith has said Britain’s welfare system is “trapping” poor people in poverty.
Mr Cameron argued that the economy has become too dependent on the public sector, over-focused on the City at the expense of manufacturing, and with too many people reliant on welfare.
But although he set out his longer term aspirations, the issue of potential tax rises and spending cuts are not expected to be mentioned until the Budget next month.
In his speech, Mr Cameron said the country was at a “turning point”.
“The decisions we make now will live with us for decades to come. For many years we have been heading in the wrong direction,” he said.
“Our economy has become more and more unbalanced, with our fortunes hitched to a few industries in one corner of the country, while we let other sectors like manufacturing slide.
“It has become over-reliant on welfare, with mass worklessness accepted as a fact of life and around five million people now on out-of-work benefits.
“It has become increasingly hostile to enterprise, with business investment in the past decade growing at around 1% each year - only a quarter of what it was the decade before.
“It has become far too dependent on the public sector, with over half of all jobs created in the last 10 years associated in some way with public spending.”

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