Cameron looks to reassert his authority after Davis hits out

David Cameron is poised to combine a sweeping Cabinet reshuffle with a series of major new policy announcements as he looks to reassert his authority in the wake of yet another high-profile backbench attack on the direction of his Government.

The Prime Minister is expected to unveil the first big shake-up of his Ministerial team since the General Election this morning, ahead of key announcements on planning policy, infrastructure spending and house-building over the coming days.

But mounting concern on the Conservative backbenches about the economic gloom which continues to cast a shadow over the party’s re-election prospects exploded again yesterday with a stinging rebuke from former leadership contender David Davis, who attacked the Government for “making heavy weather” of deficit reduction and demanded “shock therapy” for the UK economy.

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Mr Davis, the MP for Haltemprice and Howden and a former shadow home secretary, said the Government was using the eurozone crisis and the economic legacy it inherited from Labour as an “alibi”for the ongoing double-dip recession, and insisted “drastic measures” were now required to kick-start growth.

Mr Davis is a long-time opponent of Mr Cameron, and has not sat on the Conservative frontbench since his shock resignation in 2008. But he remains one of the party’s most high-profile backbenchers, and his call for immediate tax cuts will resonate with Mr Cameron’s growing number of critics on the Tory Right.

Referring to the Government’s repeated reference to the problems it inherited from Labour and the crisis in the eurozone, Mr Davis said starkly: “An alibi is not a policy.

“There is a risk that by focusing on parcelling out blame, we accept our circumstances with too much fatalism.

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“The parlous circumstances should not be an excuse for inaction, but rather a spur to dramatic action.”

Describing the British economy as “bumping along the bottom”, the East Yorkshire MP called for the phasing out of national insurance contributions along with much of the red tape he claims is hampering small firms. He also demanded a cut in capital gains tax and deeper reductions in public spending.

His attack is the latest blow to Mr Cameron and his Liberal Democrat deputy, Nick Clegg, who are trying to regain the political initiative after a bruising period which has seen backbenchers from both parties question their authority amid miserable poll ratings.

The Prime Minister hopes the first reshuffle of his Premiership will reinvigorate his Government, while shoring up his own 
support by promoting loyal backbenchers.

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Question marks were last night hanging over the Cabinet futures of West Yorkshire peer Baroness Warsi, Health Secretary Andrew Lansley, Culture Secretary Jeremy Hunt, Justice Secretary Ken Clarke and Leader of the House Sir George Young. Speculation also remains that Rotherham-born Transport Secretary Justine Greening could be moved to another role owing to her opposition to the construction of a third runway at Heathrow Airport.

Tory MPs tipped for promotion include Employment Minister Chris Grayling and Michael Fallon, the party’s deputy chairman.

International Development Secretary Andrew Mitchell looks certain to become the new chief whip, while Harrogate MP Andrew Jones – an aide in the Transport department – is among the 2010 intake of MPs with a chance of wining their first Ministerial post.

Mr Clegg, meanwhile, wants fellow Lib Dem David Laws to return to a Government position more than two years after his resignation from the Cabinet following revelations about his expenses.

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Mr Clegg appeared in Parliament yesterday to formally announce the withdrawal of his House of Lords reforms, after the programme was scuppered over the summer by opposition from Tory backbenchers.

The Lib Dem leader confirmed he would be instructing his MPs to ditch their support for boundary reforms – which would have helped Conservative re-election chances – in response.

Mr Clegg and Mr Cameron are expected to make formal announcements over the coming days on a raft of policies designed to boost economic growth, including a further shake-up of the planning system, new backing for stalled infrastructure projects and a major house-building drive.

“The Prime Minister and I will be making announcements shortly on a number of crucial issues,” Mr Clegg told MPs.