POLITICS

Downing Street Insists Cabinet Not Split On Economy, Defends Cabinet Secretary's Comments

22/04/2013 12:34 BST | Updated 22/04/2013 13:39 BST
PA

Downing Street has insisted there is no cabinet split over how to revive the economy, ahead of the potentially dire GDP figures that are due to be published later this week.

On Monday The Times reported that cabinet secretary Jeremy Heywood had said there was a "diversity of views" within cabinet, at a private meeting with a group of bankers.

According to the paper, the country's most senior civil servant told his audience that David Cameron was focused on exports, Nick Clegg wanted greater concentration on regional growth, Vince Cable wanted to get banks to lend more and George Osborne wanted more infrastructure investment.

However the prime minister's spokesperson said he was "rather puzzled" by The Times' story and attempted to play down any suggestion of rifts at the top of the coalition.

He said the government was pursuing all of the avenues outlined by Heywood. "There is a single central economic approach, within that you'd expect government to be doing a whole range of things," he said.

Asked whether it was appropriate for the impartial head of the civil service to be telling bankers about the differing priorities of senior cabinet ministers, the prime minister's spokesperson said: "I think it would be rather odd if senior officials, as part of their very important role supporting ministers, were not engaging with various sectors of industry," he said.

Heywood has become an increasingly controversial figure in recent days, after he co-authored a column in the Daily Telegraph praising Margaret Thatcher.

Last week, Labour MP Paul Flynn told Heywood he had "prostituted [his] high office and deserted [his] political neutrality" by writing the article. And Mark Serwotka, the general secretary of the civil service PCS union, used a blog on The Huffington Post UK to attack the "ill-judged, deeply unhelpful" article which he said risked doing damage to the civil service.

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On Thursday, the GDP figures for the first quarter of 2013 are due to be published. In a sign of how diminished expectations have become, the best the chancellor and his allies may be hoping for is that the figures show flat or even anaemic growth between January and March - rather than a contraction and an unprecedented 'triple dip' recession.

Last week, the International Monetary Fund (IMF) stepped up the pressure on the chancellor, by asking him to consider easing his austerity programme. IMF chief Christine Lagarde, a friend of Osborne's, described UK growth as "not particularly good".

And another former austerity ally of the chancellor, Bill Gross, manager of the world’s largest bond fund for Pimco, told the Financial Times today that government had to change course.

“The UK and almost all of Europe have erred in terms of believing that austerity, fiscal austerity in the short term, is the way to produce real growth. It is not,” he said. “You’ve got to spend money.”