Treasury minister defends strategy

THE debt crises within Greece and Italy underline the importance of the Government’s drive to tackle the UK’s budget deficit, a Treasury minister told has business leaders in Ipswich.

David Gauke, Exchequer Secretary to the Treasury, said the fiscal squeeze was born not of “some dogmatic desire” but reflected the need to protect Britain from the risk of Government borrowing costs climbing to the levels currently facing the administrations in Athens and Rome.

“Eighteen months ago, our rates were on a par with Italy and Spain,” he said. “Now, they are on a part with Germany.”

Mr Gauke, who grew up in Ipswich, where he attended Northgate High School, and is now MP for South West Hertfordshire, was speaking at the official launch of the new Ipswich Chamber of Commerce, set up under the Suffolk Chamber umbrella to give firms in the county town a clearer voice.

The minister, whose role involves responsibility for tax matters, insisted the Government was also right to have placed the focus of its fiscal policy on controlling spending rather than attempting close the deficit through widespread tax increases.

The breakfast-time event, held at Shelley’s, the training restaurant at Suffolk New College, was introduced by Dave M�ller, the college’s principal who is chairman of Ipswich Chamber, and also featured Ipswich MP Ben Gummer.

He said that, despite the difficult situation facing businesses, signs were starting to emerge in Ipswich of the rebalancing of the economy which the Government wanted to see.

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A “moderate” amount of infrastructure development could release a much higher level of private investment, added Mr Gummer.