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Cameron focuses on economy in first speech

world Updated: May 28, 2010 11:44 IST
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Prime Minister David Cameron will pledge to reverse a decline in Britain's manufacturing, cut back dependency on welfare, and reduce reliance on the financial services sector as he sets out plans to revive the country's sluggish economy in his first major speech as leader.

Cameron will speak Friday in the northern England county of Yorkshire - aiming to outline the new coalition government's plan to encourage economic growth, create new jobs and tackle the country's record national deficit.

The 43-year-old Cameron took office two weeks ago following a national election that denied the major parties an outright majority. He leads a governing coalition of his Conservative Party and the smaller Liberal Democrats.

Cameron and his deputy, Liberal Democrat leader Nick Clegg, already have announced initial spending cuts of 6 billion pounds ($8.7 billion) and said their priority will be reducing Britain's deficit. Public sector net borrowing for the fiscal year ending April 5 was 154.5 billion pounds ($233 billion).

"Britain is at a turning point today. The decisions we make now will live with us for decades to come. For many years we have been heading in the wrong direction," Cameron planned to say, according to excerpts released in advance by his office.

His speech will criticize former prime ministers Gordon Brown and Tony Blair for unbalancing the country's economy, leaving it overly reliant on London's financial district and on public sector jobs. Cameron claims that half of all jobs created in the last 10 years are linked to government spending, rather than the private sector. In recent years, Britain's financial services industry has swelled to represent two-thirds of gross domestic product.

"We have been sleepwalking our way to an economy that is unsustainable, unstable, unfair and - frankly - uninspiring," Cameron planned to say, according to the excerpts. About 1 million jobs have been lost in manufacturing since Blair took office in 1997 - partly because of the belief that Britain should focus on the so-called "knowledge economy," rather than the production of physical goods for domestic sale and export.

"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," Cameron's text said.

With cuts to welfare expected under plans to reduce the deficit, Cameron also planned to say his government will reduce the 5 million people claiming out-of-work benefits in Britain.