Britain heading in the right direction-Cameron

Sat Dec 29, 2012 7:01pm EST

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* Reports good progress in New Year address

* This is a government in a hurry, he says

* But makes no mention of relations with the EU

LONDON, Dec 30 (Reuters) - Prime Minister David Cameron said on Sunday Britain was heading in the right direction on all its major issues and could look forward to 2013 with realism and optimism.

In a New Year video message, Cameron said the country had made progress on cutting its budget deficit, reforming welfare and improving school standards.

Deficit reduction and preserving Britain's credit rating have been goals for the coalition of Cameron's Conservatives and Liberal Democrats, which came to power in June 2010 just after the budget deficit peaked at 11.2 percent of GDP.

Last year, it was down to 8 percent of GDP but the government's own budget watchdog forecasts it will take until 2017 before it falls below 3 percent and the government manages to run a surplus on cyclically adjusted non-investment spending.

Finance minister George Osborne had originally planned to meet this goal by the next election in 2015, but slow growth over the last two years now makes that look impossible.

Cameron said his administration was "a government in a hurry" which would not give in to pressure to slow the pace of deficit reduction or rein in reforms to welfare and education.

"We can look to the future with realism and optimism. Realism, because you can't cure problems that were decades in the making overnight. There are no quick fixes and I wouldn't claim otherwise.

"But we can be optimistic too because we are making tangible progress.

Cameron said Britain was heading in the right direction. The budget deficit was forecast to be a quarter smaller at the New Year than it was in 2010 and that almost half a million more people were in work since then.

"Britain is in a global race to succeed today. It is a race with countries like China, India and Indonesia: a race for the jobs and opportunities of the future.

"So when people say we can slow down on cutting our debts, we are saying 'no.' We can't win in this world with a great millstone of debt round our necks.

He made no mention of Britain's place in the European Union, an issue which many analysts believe will be high on the political agenda in 2013 and on which he is due to make a long-delayed keynote speech in the New Year.

Trailing in opinion polls and under pressure from an anti-EU group within his Conservative party, Cameron wants to take advantage of the euro zone crisis to renegotiate Britain's relationship with Brussels and win more opt-outs from its rules. .

But his pro-EU Liberal Democrat partners, including Deputy prime Minister Nick Clegg, say talk of a referendum is premature until the euro crisis is resolved.

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