DAVID Cameron will today defiantly claim the UK Government's austerity programme is beginning to work as his Liberal Democrat Business Secretary Vince Cable suggests the time might be ripe to start borrowing more to boost capital investment – the so-called Plan B.

The Prime Minister's keynote speech on the economy will coincide with an announcement by BT of the creation of more than 1000 engineering jobs.

Yet while he will tell an audience in West Yorkshire that the Coalition will stick to the course, Mr Cable suggests a change of direction might be called for.

In an article for the New Statesman, the Secretary of State says capital investment could now be greatly expanded, funded by borrowing, because the balance of risks to the economy has altered since 2010 when George Osborne made deficit reduction the keystone of fiscal policy.

Yet coming on the eve of Mr Cameron's speech and days ahead of the Budget, it will be seen by some as a direct challenge to the PM and the Chancellor. Labour said: "Vince Cable may at last be seeing sense."

Mr Cameron will say his motive for sticking to his austerity plan is "about doing the right thing to help families and business up and down the country" and not simply about making the numbers add up.

As evidence the economic plan is starting to work, he will point to a quarter cut in the budget deficit, soaring exports and one million new private sector jobs. "These signs of progress are just the beginning of a long hard road to a better Britain. But the very moment when we're just getting some signs we can turn our economy round and make our country a success- is the very moment to hold firm to the path we have set."