'20-year battle' to restore economy

Sir Jeremy Heywood Britain's top mandarin has warned that the Government is engaged in a "20-year generational battle" to restore the economy.

Cabinet Secretary Sir Jeremy Heywood suggested the austerity brought in by the coalition would have to go further, saying there was still an "enormous amount of work to be done" to tackle the deficit.

The stark comments were reported to have been made in a speech to officials at a Civil Service Live event in west London. "This is not a two-year project or a five-year project. This is a 10-year project, a 20-year generational battle to beef up the economy in ways that we have not seen for many, many decades," Sir Jeremy told the audience.

According to the Daily Telegraph, Sir Jeremy said last week's economic figures - indicating that UK plc was still 4% smaller than in 2008 - showed there was a "very, very long way to go".

"Five years on from the bottom of the recession we have still not even near recovered all the output we lost in that terribly deep recession that we suffered in 2007-08," he added. "Those are really daunting numbers that just show the size of the challenge; there is no alternative."

Sir Jeremy said that rebalancing the economy away from financial services towards manufacturing was "much easier said than done".

"All the civil servants in the room will be well aware that the last three or four years have been tough," he said. "There have been years of austerity, years of pay freezes, of pay restraint; every part of government has been told by ministers - and rightly so - to hunt out waste and tackle inefficiencies.

"But despite all these efforts we have made over the last three years... our debt/GDP ratio is still rising, debt interest payments are rising. There is still an enormous amount of work to get that deficit down to a balanced level to get the debt/GDP level falling rather than rising."

Sir Jeremy praised the "remarkably smooth" spending round for 2015-16, unveiled by Chancellor George Osborne last week.

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