Cameron: Economic Policy Will Not Change; PM DISAPPOINTED BY RECESSION

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Byline: DAVID WILLIAMSON

PRESSURE on the Government's economic strategy intensified last night after shock figures showed Britain's faltering economy was back in recession. Prime Minister David Cameron said the estimated 0.2% quarterly decline in GDP was "very, very disappointing" but insisted there will be no change to the coalition Government's programme of austerity and deficit reduction.

A slide in construction output and a stagnant services sector were blamed for the surprise slump which, after a fall of 0.3% the previous quarter, has caused the UK's first double-dip recession since the 1970s.

Experts said the first-quarter figure, which compared with City forecasts for growth of 0.1%, painted an unduly pessimistic view of the economy and there was a danger that the UK's recession tag could damage confidence and prompt firms to rein in spending at a time when growth is needed. Labour leader Ed Miliband told the House of Commons that the figures were proof that the Government's plan has failed, describing the downturn as "a recession made by the Prime Minister and the Chancellor in Downing Street". His comments were echoed by First Minister Carwyn Jones, who accused the UK Government of failing to heed his warning the public spending cuts were "too deep, too fast". Mr Miliband said at Prime Minister's Questions: "Over the last 18 months since his catastrophic spending review, our economy has shrunk. "The reality is that it is families and businesses who are paying the price for his arrogance and complacency." Mr Cameron responded: "These are very, very disappointing figures. I don't seek to excuse them, I don't seek to try to explain them away. "Let me be absolutely clear: there is no complacency at all in this Government in dealing with what is a very tough situation which frankly has just got tougher. It is very difficult recovering from the deepest recession in living memory, accompanied as it was by a debt crisis." He added: "We have got to rebalance our economy. We need a bigger private sector.We need more exports, more investment. "This is painstaking, difficult work but we will stick to our plans, stick with low interest rates and do everything we can to boost growth, competitiveness and jobs in our country." Meanwhile, Mr Jones said: "We warned the UK Government their spending cuts were too deep, too fast. We warned these cuts would lead to a double dip recession. "These figures prove we were right. The UK Government's cuts - plus high inflation and weak growth in the eurozone - make these very difficult times for businesses and people in Wales." He added: "The UK Government now need to change course and follow our lead by pursuing an economic policy which promotes sustainable economic growth, creates jobs and ensures people have the skills they need to fulfil their potential." Welsh Secretary Cheryl Gillan told the Commons that the figures were "disappointing" but not totally unexpected". She said: "Britain cannot be immune to what is happening on our doorstep. For example, Italy, Holland, Ireland, Belgium and Portugal are already in recession." The Conservative cabinet minister said private sector employment in Wales had increased by 12,000 between the third quarters of 2010 and 2011. Plaid CymruAMAlun Ffred Jones turned his fire on the Welsh Government in Cardiff, saying it had not done enough to protect the nation from the economic problems. He said: "[We have] called again and again for capital investment in newschools, hospitals and infrastructure in order to boost the economy, create and protect jobs and protect Wales from this economic storm. "But again and again, this lethargic Labour government has refused to heed these calls, preferring instead to sit back and do nothing. "I am calling on the Labour government to now reconvene the economic summits as a matter of urgency in order to bring government, business and workers together to find a way forward to help Wales weather this economic storm. …