03/09/2012 10:31 BST

David Davis Says Osborne's Growth Record Is 'Terrible' And 'Disastrous'

Senior Tory MP David Davis has launched a not-so-coded attack on George Osborne's growth strategy, saying that the UK was at the "eleventh hour" in terms of avoiding decades of economic stagnation and unemployment.

Davis, who stood against David Cameron in the 2005 Conservative Party leadership election, told an audience in the City of London that growth prospects looked poor. "Quite simply we are bumping along the bottom," he said, saying recent GDP figures were "terrible" and "disastrous for our growth strategy."

Davis was speaking at an event organised by the Thatcherite think-tank the Centre for Policy Studies, where he took a swipe at George Osborne for blaming the lack of growth on the previous government and he Eurozone. "He is right to point those out, but an alibi is not a policy," he suggested. "To understand should not be to excuse."

"If we do not take coherent and radical approach to galvasinising our economy, there is a serious risk we face a decade in the doldrums," said Davis, drawing parallels between the UK's current economic climate and that seen in the late 1970s.

He urged the coalition to pursue a "shock therapy" for the economy similar to the one deployed by the Thatcher government in the early 1980s.

His call - hours ahead of a Cabinet reshuffle - came on the first day of the new political term at Westminster, which over the next few weeks will see party conference season and the annual Autumn Statement by the Chancellor.

That statement is likely to be highly uncomfortable for the government, and will include admissions that growth and deficit reduction forecasts are wildly off-course. On Sunday George Osborne announced up to £50bn in stimulus projects for housebuilding and a relaxation of planning regulations, but Davis said the more spending would only serve as a "palliative" remedy - the real changes needed to be on tax policy and abandoning new green carbon levies due to hit businesses and energy firms in April next year.

"Inaction could deliver decades of decline and disappointment to a whole new generation," Davis claimed, criticising both calls for infrastructure investment projects like High Speed 2 and recent arguments from Nick Clegg for more taxes on the rich.

"You can either punish the rich or you can harness the rich," he said. "Punishing the rich is economically profitable but almost always economically disastrous.

"The government needs a coherent long term strategy for genuinely lower flatter taxes. That programme would take ten years to deliver, so we should start now and get on with it.

Davis refused to say whether or not he agreed with calls for a third runway to be built at Heathrow Airport, saying he would "leave that to Boris". But in a cryptic manner which will be be seen as an attack on the senior Tory MP Tim Yeo, Davis said infrastructure spending using borrowed money was almost always a bad idea, "sometimes promoted by businessmen with vested interests of their own."

Tim Yeo, the chairman of the Commons Energy and Climate Change Committee, raised eyebrows by urging David Cameron to prove whether he was a "man or a mouse" and come out in support of a new runway at Heathrow. But Yeo has been accused of standing to gain from an expanded Heathrow because of his private business interests.

In his speech Davis did not call for George Osborne to be replaced in the Cabinet reshuffle widely expected on Tuesday morning. But he warned the Chancellor that time was short if he were to change course, arguing that there was "just about" enough will among voters to accept the last government was to blame for the slump.

"I believe the electorate will decide, as it did with Margaret Thatcher, that the government was simply administering the treatment for the sins of the government before," he concluded.