too much debt can't be solved by even more spending and more debt. and crucially, we've got to keep our interest rates low. that will help firms like this expand. helps families with their mortgages. so it's right to keep with the tough decisions that we've made. but just because we're deal with the debt and deficit, that doesn't mean we don't need to go for growth. and we need to think of all the things we can do to help get our economy growing, whether that's encouraging the banks to lend more money, whether it's actually helping firms to start up, whether it's making easier for companies like this to employ more people. whether it's investing in apprenticeships, we need to do all of those things and, frankly, we need to redouble our efforts in doing all of those things. we have got to rebalance our economy. when we come in, the government was too big, but the private sector was too small. we had lots of jobs in finance, but not enough jobs in manufacturing. we had a lot of wealth concentrated in the south of the

country, but not enough spread around the country. so we've got to rebalance in all of those ways. as we do so, we've got to try and help people more. we have frozen the cancel tax. we've lifted a lot of people out of income tax. we tried to help on things like petrol duty but i know there's more we need to do. third point from me, after dealing with the debt and going for growth, we're both in this to try and build something for our country that is more worthwhile than what we inherited from the last government. what we want to do is get behind families that work hard and do the right thing. i've lost count of the times that people have said to me, look, prime minister, i work hard, and i try and save for my old age. my wife works hard. she tries to do the right thing. yet we feel that we get punished for doing the right thing rather than rewarded. so i want to make sure whether it's reforming our welfare system so that it doesn't pay to sit at home when you could work, whether it's cutting our taxes on the money that you earn,

whether it's making sure you can buy your own home and invest in that home, whether it's making sure there are good schools for your children to go to, everything this government does is not just about the dry numbers of the economy. it's about building something that is really worthwhile in our country as we take these difficult decisions. that's what fires me up. that's what the next few years have got to be about. that's what this coalition government has got to be about. nick, turnovover to you. >> thanks for letting us interrupt your day's work. your blue and yellow livery on your tractors are tailor made for this coalition. as david explained, we started off with one simple mission in mind. and that is to rescue, repair and reform the british economy. and i would just really like to add to what david said with three points. firstly, it's worth remembering what we're having to recover

from. in my view what happened in 2008 wasn't just any old recession. it wasn't just a blip on an economist's chart. we suffered a big heart attack at the very center of our market. it's like a cardiac arrest where blood no longer pumps around the system because the banks can't lend money into the economy. all that stopped. and it's painstaking work recovering from that. and it's not something we're going to achieve overnight. and so we need to bear in mind the enormity of the trauma if you like that we suffered back in 2008. a second thing i'd say is that deal with the deficit, a very dry exercise, i think we have a moral duty to the next generations and to our children and grandchildren to wipe the slate clean for them. we set out a plan that lasts about six or seven years to wipe

the slate clean to rid people of that dead weight of debt that has been built up over time. just imagine if you didn't take the time to get it right now. just imagine if our children and grandchildren had to facing years and years and years of more cuts and more saving ofs with no end in sight. so i think we owe it to the youngsters of today to lift that dead weight of debt off their shoulders. and for those critics who say about us in this coalition government that we're mao, ysom doing this with ideological reasons, that we're doing this because we want to shrink the state, nonsense. we're doing this, not because we want to but because we have to. even at the end of this parliament, we as a government will be spending about 730 billion pounds of your money. that's about 42% of national wealth of gdp which is more, by the way, than any time between

1995 and the time when the banks went belly up in 2008. and the final thing i'd say is this. dealing with the deficit is a means to an end. austerity alone doesn't create -- doesn't create growth. it's unnecessary but not sufficient step towards creating growth. but the end, what we are absolutely dedicated towards is creating jobs. creating prosperity, creating investment. creating opportunity. creating optimism and hope in our country. and i think as david has indicated, we know we need to do more. constantly strive to do more to create and foster the conditions for growth. and i would particularly underline two areas. firstly, getting lending to british businesses, particularly small and medium sized enterprises. i've just met too many small companies who say they've got great business plan. they are healthy companies and they simply can't get ahold of money. they can't get ahold of the money on reasonable terms.

they can't create jobs. we're doing a whole lot to try and fix that problem but i think we all accept in government we need to do more. and the final thing is, invest in infrastructure. not just public money, but private money because we've got infrastructure, road, rail, energy, housing. much of which is just far too old. we need to invest in that for the future that helps create jobs today and a growing, prosperous economy in the future. with that, thanks again, and over to you. >> thank you very much. >> okay. thank you very much. we've got a roving microphone. who wants to ask the first question? sir? >> you've both given us a speech about how you're going to try and make things better. but it seems to me that neither are singing on the same hymn sheet. every time you come up with a policy, the dems come up with a

policy you want to water it down. how are you going to work together to solve this crisis? >> what i would say -- thank you, sir. obviously, we're different parties. conservative party, liberal democrat party. we don't always agree, but i would argue actually in the last two years, the government has actually done a lot of things that needed to be done. we've cut the deficit. we made difficult decisions about cutting some areas of public spending, about having to increase some taxes because we inherited a situation where our budget deficit was bigger than that in greece. so although we might have had different views, we put those aside. we cut the deficit for the good of the economy. we both also took some very difficult decisions on welfare. for the first time information our country we've put a cap on welfare and said that no family out of work should be able to get more in welfare than the average family gets in work. again, a difficult decision. one that's never been taken before, but we workeding to the do that. and whatever the area, i would say, you know, whether it is

getting immigration under control, where we put in place some tough limits, whether it's reforming our education system, where we put in place much tougher standards in terms of discipline and teaching proper subjects like math and english, we're not always going to agree, but in the end, we've produced some pretty chunky, clear policy of things that needed to be done. now, of course, i would like to conservative only government. nick would like to run a liberal democrat only government. you the voters, though, decided that no one won the last election and effectively you are asking us to work together. now i would argue, in spite of the differences we sometimes have in spite of the arguments we sometimes are have, we have put those differences aside and taken pretty tough action on the deficit, on welfare, on education and i think this coalition government is delivering. but i accept it's a tough time in our country. it's a difficult time in our country and we've got more work to do. >> all i would add to that is,

judge us by our actions, not by our words and with the greatest respect to the members of the press around, judge us by what we do rather than what people say we are doing or not doing. if you look at what we've managed to do over the last two years, it's a pretty remarkable -- we were accused for a lot of that period of time that we were doing too much. rushing to try to do too many things at once. reforming welfare. reforming education. changing the tax system. fixing the broken banking system. fixing the black hole in our public finances. involved in military action in libya all at the same time. that's a lot for any government, single party or coalition party. i think about the things i care about. i am hugely proud of the things i fought for for my political life. more money for kids from disadvantaged backgrounds in school through the pupil premium. more apprenticeships and developed by any government since the second world war. raising the allowance, the point

at which you start paying income tax by the highest amount ever. these are things we're delivering through coalition in the same way david is delivering for his party things his party believes in, but we're doing it in a coalition government. i think, you know, you always get ups and downs in politics. but i think the idea of politicians fromparty s setting aside their differences and working in the national interest is something that i hope most people think is a good thing to do. >> next question? the gentleman -- >> going to increase spending on manufacturing apprentiapprentic. i've been in this company 37 years. the last 20 years we haven't had apprentices. that skill base is -- we're all getting older. if you don't get your act together, you're not going to have the people here that are going to be able to do these jobs. are you going to increase money in manufacturing apprenticeships? have you got a plan for that?

>> i've not only got a plan. we're doing it. apprenticeships are expanding at a rate they haven't done for a generation. during the course of this parliament, this coalition government will deliver 250,000 more apprentices than were planned by the previous government. it's one of the things actually i think really brings both parties together is a kind of passionate belief that we've got to kind of give the same sense of esteem and respect for vocational education, including apprenticeships as we traditionally have for an academic university base. for too long there's been this barely disguised snobbery that says once you leave school the only good thing to do is to go to university. of course it's not right. and we know from the most competitive economies in europe and elsewhere, look at germany. look at denmark and some of these countries that have very successful economies. it's because they value vocational education just as much as academic education. and that's why we're investing huge amounts of extra money in

expanding the number of apprenticeships which are available. >> about half the board of rolls royce, half the board were ark prentices. so the apprentices behind us have the ambition of not just working at this company but of running great companies like that. that's the motivation that fires us up and why we're putting money into ark prenticeships and not just universities. next question. sir? hold on. we need a microphone for you. >> how can the uk government promote the equipment made in the uk has an appeal to the british farmer? >> say that again? >> how to make equipment in the uk that has appeal to the british farmer. >> i think it's going to be on quality. i represent a big constituency in the south of england. 400,000 square miles. a lot of agricultural land and the farmers that i represent, they want to buy the best. they want good equipment. and this is fantastic to be in this factory, the last tractor

factory in britain that makes, i think, 92% of what you make is for export. but you're also supplying the domestic market. i think in the end if we want a healthy farming industry, what we've got to recognize is that that really depends on us as consumers going into shops and supermarkets and wanting to buy quality british produce. of course we've got the common agricultural policy and all the schemes and grants and everything to help farmers. but in the end if you want healthy farming, you want consumers saying, british meat is the best. british food is the best. i want to demand the best and i want to go out and buy the best. that will be good for british agriculture and good for your business, too, as you sell them the tractors they need do all the work they do on our behalf. next question for the gentleman over here. >> france is one of our biggest customers. with the recent elections in france now with the socialist government, how optimistic are you that they will remain one of our biggest customers?

>> i think france is one of our oldest, strongest, most important allies, sometimes rivals as well over our history. i think president hollande has made it very clear that he wants to place a lot of emphasis on growth. i don't think anyone would disagree. who is going to disagree with someone saying we have to grow our economies. that's exactly what we're about. he knows as well as all of us do that you can't create growth on the kind of shifting sands of debt. you have to create stable foundations upon which you grow an economy. and i think in all of us in the government here in london are looking forward to working with him, working with his ministers on the new ideas they've got about how we can foster growth because that's good for the french economy. good for french consumers. it's good for the british economy and it's good for british workers, not least here because you produce so many things that are then bought in

france. so any emphasis on growth from whatever direction of the political sect rum has got to be a very good thing. >> i'd i agree with that. if you look at what we're doing here. interest rates at a record low. we've got a big budget deficit so we can't increase spending. can't do tax cuts that are unfunded. so the way to get growth in our economy, the way to get growth in the french economy is look at all the things that hold our businesses back. can we get our banks lending. can we make it easier to employ people? can we make it cheaper for firms to go out and employ people? can we invest in apprenticeships so there are better people for companies to take on. and across europe, we talk about the single market. we haven't even completed it. you know if you look at things like energy policy, if you look at digital technology if you look at things like music and things that we're good at in this country, the single market isn't even finished. services which are very good out in our country we haven't finished.

one of the arguments we've got to have with the new french president as with all the other european countries is we've got this great european market, but let's finish it because that's one of the best boosts we could give to growth when actually our interest rates are already low and our budgets are badry stretched. and that's the discussion we'll be having with the new french president. next question. sir. there we go. we need a microphone. >> the cost of fuel on running these machines in particular has an impact on food costs. what can the government do to alleviate some of that costs, particularly for british farmers? >> well, obviously with british farmers, we've got the issue of red diesel. so there is an advantage already in -- built into the system. looking more generally at fuel prices which i know are extremely high at the moment, the government has tried to help because we canceled some of the

tax increases that were in place. we also cut fuel duty by a penny the last budget. we spent 4 billion pounds trying to keep diesel price and petrol prices low. it's difficult to fight against the overall increase in oil prices that's happened worldwide. so i think it is testing. we're going to rely on businesses as well to keep developing, as i know you are. cleaner and more efficient engines to try to keep costs down because oil prices in the end are what drives the price. but if we can make sure that the word diversifies its energy supplies and we become less reliant on petrol and diesel in other elements of life, then it will be -- that will have a good effe effect. next. do you want to just wait for the -- here she comes.

>> what are the positive items for 2012, of course is the olympics. what do you guys see as the positive legacy that we'll get within the country? >> i think -- i don't think in many ways we get woken up to what a big, big thing this is. it is unbelievably exciting. the eyes of the world will be -- it's a well-worn cliche but it is so true. it's going to have, i think, a massive effect on that part of london in the long run. i think it's going to be a brilliant opportunity for us to kind of show ourselves off as an optimistic country, as an open country, as a diverse country, as a young country, as a country open to the -- well, i hope we win a few sort of medals in the process. there are lots of ways you can judge the legacy. part of the legacy is, does it help create jobs, particularly in that part of london. another legacy which i think is a really important one is will they inspire lots of youngsters who are now at school who look

at the olympics to take up sport in a way that they might not now. if you just crack that, that would already have such a dramatic effect on the health and well-being of the young people in this country. so i think it's an immensely exciting. i hear some people say, there's going to be disruption. yeah, there is going to be a bit of disruption. thousands upon thousands of people. but at the same time a showcase for us to show ourselves off to the rest of the world. >> actually, this week, we've got the school games taking place at the olympic site. and i agree that there hasn't been enough competitive sport in our schools for many, many years. we need to get competitive sport back, team sport back in schools. and the school olympics has been a great success. over half the secondary schools in the entire aunt have taken part and this week the finals are taking place at the olympic park. the other thing is, all of the venues we're securing a legacy for. so it's not like some olympics where you build great facilities

and then a few years later they are all covered in tumbleweed or you've actually had to take them down. almost all of them are going to have a real, tangible legacy and huge amounts of use for the future. whether the velodrome for cycling or the aquatic center for swimming. we've secured legacy. it's one of the reasons we won the contract is it's a legacy games with real use for the facilities afterwards. next question. jents gentleman at the back. >> will there be more quantitative easing this year? >> oh, no, we don't want to talk about that because it's the bank of england which is entirely independent as it should be. but i think one thing that has been obvious in everything we've done over the last two years is if you want in the jargon of a monetary authorities central banks to do their bit to kind of get some money into the system, they are only really going to feel free to do that if they feel the government is doing its

side of the bargain by kind of filling the black hole in the public finances. so there's been a lot of activity from the bank of england over the last period, quantitative easing. it's immensely important to the british economy. i think it's unlikely that would have been possible if the government at the same time hadn't been kind of dealing with this deficit and debt issue at the same time. >> that's absolutely right. sometimes what people say to us why not just go easy on the public spending decisions. why not go easy on the deficit and the debt. if we did so you could see any rates go up. and for every 1% on interest rates, basically hits the typical family mortgage by about 1,000 pounds a year. so it would be totally self-defeating which is why i think we need to stick to the plans we set out. we're going to take a couple of questions from the press, if that's okay. mr. robinson from the bbc. >> thank you very much, deputy prime minister. nick robinson from bbc news.

europe is turning its back on austerity. do you fear that britain is begaining to tu ing ting t ingi turn its back on austerity? why are you forcing him to back house of lords reform and mr. cameron, why on earth are you letting him? >> let's deal with this issue of what you call austerity, what i call efficiency, deal with our budget and getting growth at the same time. we need to do both those things. if you look at what president holland d hollande is suggesting, his plan for getting rid of budget deficit is on a pathway with ours. i think it's a bit of a myth to believe that somehow there's some people in europe that are going to spend a lot more money and those of white house realize we have to deal with our debt and our deficit. we all have to deal with our deficits. if we don't, our interest rates will go up. that's the fact and that's why we've got to deliver these difficult public spending reductions that also everything

we can do to get growth at the same time. now house of lords reform, okay. i wouldn't for a minute say this is the most important thing the government is doing. of course it isn't. but parl simt quite capable of doing more than one thing at a time. do i think it would be a good idea if actually parliament delivered a house of lords that had people who were elected by you, the members of public in the house of lords to pass the laws that we all have to live by? sure i do. and every single party, major party, went into the last election saying that they wanted to reform the house of lords. so i think it's a perfectly sensible reform for parliament to consider. as i say, what matters, the things we're really focused on, getting that deficit down. getting our economy moving and creating a country and a society that's more worthwhile where people feel if i put in, i get out. if i work hard, i do the right thing, i will be able to do better for myself and my family. that's the program that the government is really pursuing. but sorting out some of our constitution at the same time, i

don't see why parliament can't deal with that, as i said. >> on the first point, it's worth remembering that the new french president, i think he said he's committed to balancing the books in france by 2017. now when we discovered as a coalition government last autumn that there was more pressure on the public finances than we'd anticipated, you know what we did? we didn't say we're just going to cut more. we said, okay. we're going to take a little bit longer. we're going to take a couple more years to do this. i think some of the caricatures that suggest somehow on the other side of the channel people aren't dealing with their deficit at all and we're rushing to do it much quicker, they're just that. caricatures. serve trying to deal with their deficits over a reasonable period of time. on house of lords reform. you know what? i care a lot more about apprenticeships than house of lord resform. i care a lot more about the fact that as of next april, 2 million

people on low pay will be taken out of paying income tax for the first time because we're raising the point at which they have to pay income tax. i care more about children from disadvantaged backgrounds doing well out of school and getting ahead and having real opportunities in life than i do about house of lords. it doesn't mean you can't do other things. and i have to say, my own view is that whilst i know it's wildly controversial in westminster, i think most people think that the principal that the people who make the laws of the land to be elected by people who have to obey the laws of the land isn't as controversial outside of westminster. i don't think it will go amiss since we've been talking about it for 100 years. >> christian from itv. >> thank you prime minister. you say you've heard the message from voters. no real sign, though, that you are actually listening. since friday's results came in you say yooir going to drill down on the deficit.

you're going to rebalance the economy. you said that before. you'll get on the side of hard-working people. you said that before. i'm struggling to see quite what has changed since the hammering that you both got last week at the polls. >> as i put it clearly, we've got to focus very clearly on the things that matter most. that is the economy. that's people's living standards. people's jobs. getting the economy moving. i mean if you ask what i'm going to be doing over the next few months or the deputy prime minister will be doing, it's going to be checking that the work program is up and running and taking people all the dole and giving them jobs. it's going to make sure the apprentices are rolling out and really being delivered in our companies. it's getting out, getting around the world, opening up our export markets and making sure we can sell great british products around the world. it's about hammering this argument with the banks and making sure they really are lending money. it's about going through every single sector and segment of our economy whether it's life sciences, green technology, energy. and what more can we do to get our economy moving and our

economy going. that's is actually going to be the focus of my time, the focus of the deputy prime minister's time in terms of what matters. so it's focus. it's delivery and proving that this is a coalition government. yes there are differences. but that came together in the national interest and can deliver in the national interest during the life of this parliament. >> one specific thing, chris. i think it's not lost on me nor is it i'm sure on the prime minister that where there are two parties, got a particular beating in wales, scotland and particularly the large cities of the north of england. i mean, there are ups and downs in other parts of the country. now i tell you what. i take one very important lesson from that which is that we must redouble our efforts in this coalition government to govern for the whole country. and i think there is a particular dilemma, and i say this, of course, as an mp from sheffield. there's a particular dilemma in

those parts of the country which are particularly located in scotland, wales and the north. not exclusively but particularly where for the last 10, 15, 20 years, they've been reliant, some would say overreliant on subsidies from governments in white hall and that those subsidies in turn were funded by explosive growth in the city of london. basically what we had for years and years and years was an economic model which is now broken. it's hit the buffer. and that economic model relied on governments sucking up to the city of london, basically letting the banks get away with murder. they generated huge pots of tax revenue and it was transported up, republic subsidy to other parts of the country. and that was all fine as long as the money was there. that merry-go-round was fine as long as it kept going around and round. it stopped. whoever is in government will have to face this really difficult challenge of what you do to rebuild those economies that have become lopsided. and that's why, for instance, i

believe so passionately in us investing more, rather than less, as we are in manufacturing because that disproportionately helps those parts of the economy in the north of england and elsewhere. so if you think we can do that between friday and tuesday, i'm afraid you can't do it that quickly. but i think the lesson of last week's elections is we must redouble our efforts to govern for the whole country. >> i just wanted to ask you, to all the people who are frustrated about lack of jobs, opportunities and all the rest of it, what's been holding you back up till now? what's been the problem over the past couple of years? >> i think the biggest problem is that what we found is that the damage done during the recession was much greater than people first realized. you know, the level of debt in our hoisholds. the level of doubt in oebt in o government has made recovery difficult. i think what's happening in our economy is there is some rebalancing going ahead. compared with the election, there are