Clegg vows government will not change cuts course

Monday 28 January 2013

The UK Government will "absolutely not change course" in its plans to tackle the deficit, Nick Clegg has said.

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The Deputy Prime Minister said the Government was committed to finding innovative ways of raising funds for capital investment – but warned a return to the "bad old days" of extensive borrowing was not the answer.

Mr Clegg's comments came amid rising calls for a new economic strategy to be unveiled by Chancellor George Osborne in his March Budget. Figures revealed a drop in GDP threatening a triple-dip recession.Mr Clegg said: "You can be very tough on the deficit – which we have; we have reduced it by a quarter – and you can be restlessly creative about how within those strictures you do things to make the economy grow."We're being tough, but pragmatic. We are being resolute but innovative. If people have ideas about how we can provide further capital investment into our infrastructure, without breaking the bank, of course we are open to that."We are absolutely not going to change course in paying off one of the world's largest budget deficits. Why? Because if you just shrug your shoulders and say it's too complicated, we end up asking our children and grandchildren to pay off this generation's debts."Mr Clegg highlighted Crossrail as one of the largest infrastructure projects in Europe and said announcements about HS2 would heal the north-south divide.And the Liberal Democrat leader said £50 billion of guarantees were available from the Treasury to help drive infrastructure projects forward.However, Mr Clegg warned some sectors of the economy would take longer to repair than had been hoped. The Deputy Prime Minister rejected claims he dubbed the Government's cuts to capital investment early in the coalition as a mistake. He said: "What I was describing is what is the fact... What we did in the first instance, Labour said there was no money left so we couldn't go around writing cheques. What we have done since then is found ways to raise new capital."Office for National Statistics calculations showed the economy flatlined in 2012, and experts predicted it would not regain its peak level for another two years.London mayor Boris Johnson urged his Tory colleague to "junk talk of austerity" and press ahead with major infrastructure projects to revive the economy.Among senior financiers speaking out was Jim O'Neill, chairman of Goldman Sachs Asset Management, who said the GDP reverse showed fiscal policy had been "tightened too much" by the Chancellor. The added voices come days after the International Monetary Fund slashed the UK's growth outlook to 1%.

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Clegg vows government will not change cuts course

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