By Richard Johnstone | 5 February 2015
Deputy Prime Minister Nick Clegg has pledged an end to austerity in three years after May’s general election if the Liberal Democrats are returned to government.
Setting out the LibDems’ fiscal policy in a speech today, Clegg said the coalition’s plan to close the deficit in 2018/19 showed that difficult decisions had successfully been taken to reduce spending.
‘Times have been tough for lots of people across the country who have had to work hard and make real sacrifices to get where we are today,’ he said.
‘For the Liberal Democrats, austerity was always a means to an end – and the end is in sight. If we stick to the sensible and balanced course we have set, there will be light at the end of the tunnel. An end to austerity in three years’ time.’
Once the public finances were in balance, the LibDems would commit to linking spending in public services to growth in the economy, different from Chancellor George Osborne’s approach to keep spending down to run a permanent surplus.
This was a sensible and balanced approach, he said. The party would also ensure that some of the fiscal tightening needed to reach a surplus – estimated at around £30bn by the Treasury – would come from tax rises.
Among those planned was the introduction of new council tax bands for properties worth more than £2m to implement the party’s so-called mansion tax.
‘Our plans mean there is no need to increase income tax, VAT or National Insurance rates,’ Clegg announced.
‘Yes, there will be more cuts - £16bn worth, including £4bn from the welfare budget – but that means that in the second half of the parliament we will be getting the national debt down and putting money back into our public services.’
Overall, he said that LibDem plans meant that by the end of the next parliament in 2020, there would be £38bn less in cuts than the Conservatives, but £70bn less in borrowing than Labour.
