Heywood: 20-Year Battle To Fix UK Economy

Britain is in a "20-year generational battle" to rescue the economy, according to the country's most senior civil servant.

Cabinet Secretary Sir Jeremy Heywood has suggested drastic austerity measures implemented by the coalition may have to go further.

In a speech to officials at a Civil Service Live event in west London, he reportedly declared there was still an "enormous amount of work to be done" to tackle the deficit.

His stark comments come after Chancellor George Osborne unveiled a further £11.5bn in spending cuts, extending his austerity regime into the next parliament.

They will take the edge off increased optimism sparked by new figures showing Britain never sank into a double-dip recession.

Sir Jeremy Heywood warned full economic recovery will take decades

"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 said.

The mandarin cited last week's economic figures indicating UK plc was still 4% smaller than in 2008 showed there was a "very, very long way to go", according to The Daily Telegraph.

"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 Mr Osborne last week.

Measures in the Chancellor's statement included more swingeing cuts to Whitehall departments, a welfare cap and further action to curb public sector pay.

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