27/01/2014 04:19 GMT | Updated 27/01/2014 04:59 GMT

David Cameron Says We Need To Be Patient On Living Standards

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David Cameron, U.K. prime minister, pauses during a Bloomberg Television interview on day three of the World Economic Forum (WEF) in Davos, Switzerland, on Friday, Jan. 24, 2014. World leaders, influential executives, bankers and policy makers attend the 44th annual meeting of the World Economic Forum in Davos, the five day event runs from Jan. 22-25. Photographer: Jason Alden/Bloomberg via Getty Images

David Cameron insisted the Government has taken "difficult" decisions in order to help ease the cost of living but said patience was required to rebuild the country's economy for the long term.

The prime minister welcomed the rise in employment although he acknowledged improvements were needed in the UK's productivity.

He also indicated that he was happy with growth fuelled by consumption as "a recovery has to start somewhere".

Faced with sustained Labour attacks about the squeeze on household finances Cameron told BBC Radio 4's Today programme: "This Government has chosen to take difficult decisions about public spending in order to help people with their standard of living by freezing petrol duty, by cutting income tax, by freezing the council tax, by doing things that make government less expensive."

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The two Eds have focused their attacks on the 'cost of living crisis'

But he acknowledged that more needed to be done: "If you say to me that all of this takes time and we have to be patient in delivering our long-term economic plan and that we are recovering from the longest and deepest recession that made our country poorer and in order for people to feel better off we need sustained recovery, I absolutely agree.

"But the key thing is to put in place those things that will deliver that sustained recovery: the skills for our young people, the infrastructure for our country, the support for small business that will deliver the employment, cutting people's taxes by keeping spending low so people feel the benefit of the growth, all of those things are part of our plan."

Cameron insisted that the recovery was balanced, but said he wanted to see more growth outside the capital and increased success in the manufacturing sector.

"We are recovering from the longest and deepest recession in living memory and so it takes time and we have to be patient and we have to stick to our long-term economic plan which is going to deliver for people who work hard and play by the rules," he said.

"If you look at the most recent data on the economic figures it's shown quite a balanced recovery. You've seen manufacturing grow as well as services, you are seeing housebuilding and construction growing as well as financial services and consumption.

"So I think we are seeing a balanced recovery. Do I want to see more growth outside of London and the south east? Yes. Do I want to see more export-led growth, more manufacturing growth? Yes, absolutely and that's all part of the long-term economic plan.

"But the economy is moving and above all it's creating jobs. We have seen, compared with when I became prime minister, there are 1.3 million more people in work. That is 1.3 million more people with the financial security that a regular pay packet brings."

But he acknowledged concerns about poor productivity compared with international rivals: "I think these things will take time. We do need to see improvements in productivity but frankly I'm glad that the first stages of recovery have been seen in greater employment rather than anything else because I don't want to see people sitting on unemployment registers for a moment longer than they need to."

The prime minister echoed Mark Carney's views about consumption-driven growth: "As the Governor of the Bank of England said about consumption, a recovery has to start somewhere and then you can build on that recovery."