David Cameron has called for US-style protection laws for firms at risk of going bust - but also said he could not rule out tax rises in the future.
David Cameron has called for US-style protection laws for firms at risk of going bust - but also said he could not rule out tax rises in the future.
The Conservatives would adopt a version of the chapter 11 scheme which gives businesses a "breathing space" to establish funds and save jobs, he said.
The Conservatives would adopt a version of the chapter 11 scheme which gives businesses a "breathing space" to establish funds and save jobs, he said.
Mr Cameron said a "full-blown plan" was needed to cope with the credit crunch.
Mr Cameron said a "full-blown plan" was needed to cope with the credit crunch.
He also said he "hoped" his party would not have to raise taxes but had to "safeguard the public finances".
Minister John Hutton said the plan was "poorly thought through". The Lib Dems said it would only help executives.
'Struggling economy
'Struggling economy
In his speech to the CBI, the Tory leader said he would introduce a "fuel stabiliser", lowering tax when oil prices rise and help savers, home owners and families.
In his speech to the CBI, the Tory leader said he would introduce a "fuel stabiliser", lowering tax when oil prices rise and help savers, home owners and families.
He also said he "hoped" his party would not have to raise taxes but had to "safeguard the public finances".
We ought to be taking action now, showing leadership now to try to save those jobs David CameronConservative leader
Those most in danger from a "struggling economy" must be helped - including employees, he argued.
Those most in danger from a "struggling economy" must be helped - including employees, he argued.
Mr Cameron said the credit crunch meant more companies were finding it hard to get hold of the funds they need to survive - and are increasingly facing liquidation, leading to job losses.
Mr Cameron said the credit crunch meant more companies were finding it hard to get hold of the funds they need to survive - and are increasingly facing liquidation, leading to job losses.
"In America they have Chapter 11 which is a stay of execution," he told BBC Radio 4's Today programme.
"In America they have Chapter 11 which is a stay of execution," he told BBC Radio 4's Today programme. "Instead of companies going straight into liquidation and having to lay off staff, they get a stay of execution and they can be restructured to try to save the business, to try to save the jobs.
We ought to be taking action now, showing leadership now to try to save those jobs David CameronConservative leader
"Instead of companies going straight into liquidation and having to lay off staff, they get a stay of execution and they can be restructured to try to save the business, to try to save the jobs.
"Now that doesn't actually cost taxpayers money, but at a time when we've got economic difficulty and at a time when companies may get into these sorts of problems, we ought to be taking action now, showing leadership now to try to save those jobs."
"Now that doesn't actually cost taxpayers money, but at a time when we've got economic difficulty and at a time when companies may get into these sorts of problems, we ought to be taking action now, showing leadership now to try to save those jobs."
While Mr Cameron conceded that not all companies should be saved, he said "the least we should do" was to look at what other countries do to save jobs.
While Mr Cameron conceded that not all companies should be saved, he said "the least we should do" was to look at what other countries do to save jobs.
Trouble?
US companies filing for chapter 11 keep control of their assets and daily operations as negotiations continue in the bankruptcy court.
US companies filing for chapter 11 keep control of their assets and daily operations as negotiations continue in the bankruptcy court.
The Conservative plans would allow courts to grant protection to a UK business that could not pay its debts, but had a good chance of restructuring successfully.
The Conservative plans would allow courts to grant protection to a UK business that could not pay its debts, but had a good chance of restructuring successfully.
The party says similar restructuring deals do take place in the UK but, without set rules, can be inefficient.
The party says similar restructuring deals do take place in the UK but, without set rules, can be inefficient.
Deposit protection
Business Secretary John Hutton said the Tory plans would cause banks to tighten their lending and put more companies into trouble.
Asked about whether an incoming Tory government would have to raise taxes, Mr Cameron said: "I hope that won't be the case because I do think we have more responsible spending plans now.
"We have already made changes to UK law into the Enterprise Act 2003 to help companies through difficult times," he said.
Obligations
"Importing chapter 11 into the UK is a poorly thought through idea from the Tories. Chapter 11 in the US is a more expensive, court-based system of administration."
Liberal Democrat Treasury spokesman Vince Cable said: "The Conservatives claim to support free fair and competitive markets, yet they now seem hell bent on introducing a measure which only helps incompetent executives.
"Chapter 11 allows people who have mismanaged their companies to continue to run them free from their debt and pensions obligations."
Asked on Today whether an incoming Tory government would have to raise taxes, Mr Cameron said: "I hope that won't be the case because I do think we have more responsible spending plans now.
"Government always has to do what is right to safeguard the public finances.
"Government always has to do what is right to safeguard the public finances.
"And as I say the tragic thing now is that, at this point in the economic cycle, what the government ought to be doing is actually cutting taxes. It should be giving a fiscal stimulus to the economy."
"And as I say the tragic thing now is that, at this point in the economic cycle, what the government ought to be doing is actually cutting taxes. It should be giving a fiscal stimulus to the economy."
Every person turning to benefits should be giving an assessment of their needs and capabilities and offered help with finding a job, he said.
Revolution
Under Tory plans, every person turning to benefits should be giving an assessment of their needs and capabilities and offered help with finding a job, he said.
He urged the government to introduce legislation before the parliamentary recess to protect deposits of up to £50,000 per customer.
He urged the government to introduce legislation before the parliamentary recess to protect deposits of up to £50,000 per customer.
The proposals would not have applied to Northern Rock, the Conservatives say, as financial institutions are regulated separately.
The proposals would not have applied to Northern Rock, the Conservatives say, as financial institutions are regulated separately.
Meanwhile, in a separate speech later, shadow chancellor George Osborne will say "fixing" society is integral to economic success.
Meanwhile, in a separate speech later, shadow chancellor George Osborne will say that "fixing" society is integral to economic success.
He will tell the Centre for Policy Studies the quality of British education has to improve so Britain can compete in "the age of the knowledge economy" and the Conservatives would aim to "bring about a revolution in our welfare system".
He will tell the Centre for Policy Studies the quality of British education has to improve so Britain can compete in "the age of the knowledge economy" and the Conservatives would aim to "bring about a revolution in our welfare system".
Are you affected by issues covered in this story? Would you like to see the introduction of US-style business protection laws? Has your business been affected by the credit crunch? Send us your comments using the form below.
Are you affected by issues covered in this story? Would you like to see the introduction of US-style business protection laws? Has your business been affected by the credit crunch? Send us your comments using the form below.
