Nick Clegg: there is no magic lever for economic growth
Deputy PM says shedding debt is key to prosperity as Ed Miliband attacks 'sell-out of the next generation'
Nick Clegg has defended the government against charges made by business leaders and opposition politicians that the government has no plans for growth, but admitted ministers had no magic lever.
Faced by charges that the government programme is simply a plan to cut the deficit, he said unwinding the toxic legacy of debt was a vital precondition of a growth plan.
But the Labour leader, Ed Miliband, claimed in a rival speech that catastrophic spending cuts were one reason prosperity was no longer going to be passed from one generation to the next.
He set out a vision of the British promise a homegrown version of the American dream which he claimed was being broken because a new generation was being stripped of the right to jobs, higher education, apprenticeships, child trust funds and the security of a welfare state.
"Selling out the next generation is the ultimate short termism," he said, adding that addressing this challenge would be at the very centre of Labour's policy review.
Clegg countered by claiming that handing on debt to future generations was "little short of intergenerational theft".
The deputy prime minister spelt out four key elements of the growth package:
Weaning ourselves off debt-financed growth, and on to investment-led prosperity.
Investment in the "hard" infrastructure that underpins growth, such as transport.
Cultivating the "soft'' infrastructure made up of knowledge, skills and education that businesses need.
Balancing regions and sectors, instead of putting all our economic eggs in one basket .
The government is still jumpy after unexpected negative growth figures for the last quarter of 2010. The reverse led to calls from the Institute of Fiscal Studies to have a plan B ready, on the basis that growth will not be as high as ministers had forecast as recently as November.
There i! s growin g anxiety within the coalition that its deficit reduction plan is not, in itself, enough to drive economic growth.
Speaking in Rotherham, the Liberal Democrat leader emphasised the importance of green growth. He said: "We are determined to foster a new model of economic growth, and a new economy one built on enterprise and investment, not unsustainable debt. If the coalition government simply pays off the deficit, but leaves the underlying economy unchanged, we will have failed."
But Clegg also accepted the limits of what the government could do to achieve growth, saying there was a temptation among politicians to "churn out initiative after initiative, in a desperate attempt to stimulate the economy or all too often to try and give the appearance of doing so.
"And politicians can fall prey to the myth that somewhere there is a lever they can pull to generate growth and that they should simply pull as many as possible in the hope of finding it.
"We have learned, the hard way, that an economy built on debt is built on sand. Right now we are going through the sometimes painful process of unwinding a toxic legacy of personal, business and public debt."
Clegg acknowledged that Britain faced "a long, hard road back to prosperity" following the recession but he said that there were "strongly positive signs" from recent indicators on manufacturing, construction and services. He added: "Things are difficult, but it is not all doom and gloom."
He promised the government would be setting out its plans for regulating the banks shortly.
Clegg also insisted: "There is a moral dimension to the deficit reduction plans."
He said: "I have never understood those who say it's more 'progressive' to delay tackling the deficit, so that we shuffle off responsibility for our debts to the next generation to deal with.
"This strikes me as little short of intergenerational theft. It is the equivalent of loading up our credit card with debt and then expecting our kids to pay ! it off."
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