Britain has limited protection from Europe's debt storm, Cameron says

London: In his New Year message to the nation, British Prime Minister David Cameron on Sunday served notice that the economy faces another tough and possibly worse year as he admitted that Britain may only win a temporary respite from the crisis in the Eurozone.

As Angela Merkel and Nicolas Sarkozy warned of a bleak year ahead, Cameron used his new year message to declare that Britain can only secure "some protection" from the "debt storms".

The warning contrasts with a bold statement in his New Year message last year in which he stated: "We have pulled Britain out of that danger zone."

Amid fears among ministers of a double-dip recession this year, Cameron says the government's deficit reduction plan has ensured the markets have not targeted Britain. But he takes the rare step of qualifying this claim, which has been at the heart of the government's defence of its decision to cut the deficit at a faster rate than Alistair Darling planned to.

Strong plans

In his message, filmed for the Downing Street website, Cameron says: "We've got clear and strong plans to bring down our deficit, which gives us some protection from the worst of the debt storms now battering the Eurozone. We have gained security for now and because of that, we must be bold, confident and decisive about building the future."

The prime minister, who faced criticism for initially relying on monetary policy and waiting 18 months before setting out a major growth plan in the autumn, admits more needs to be done for the economy.

"I know much needs to change. We've got to do more too to bring our economy back to health. So we've set out big plans for the transformation of our infrastructure, starting now with better roads and railways, superfast broadband and new homes." Cameron will say he understands people's concerns about rising utility bills and the future of their jobs.

Search for work

"Of course I know that there will be many people watching this who are worried about what else the year might bring. There are fears about jobs and paying the bills. The search for work has become difficult, particularly for young people.

"And rising prices have hit household budgets. I get that. We are taking action on both fronts. I know how difficult it will be to get through this. But I also know that we will."

As Ed Miliband, the Labour leader, prepares to sharpen his attack on the Tories as the party of privilege, Cameron pledges to take action against excesses in the City. Ministers are expected, as Nick Clegg confirmed last month, to impose restrictions again on bonuses in the state-controlled banks.

It is understood that the government may repeat the restrictions of last year, including a shrinking of the bonus pool at Royal Bank of Scotland and Lloyds.