Nick Clegg defends government over economic growth plan
Nick Clegg has defended the government against accusations that it does not have a plan for boosting the economy.
In a speech, he said the government could not pull a lever to generate growth, and was in the process of unwinding a "toxic legacy" of debt.
He said deficit reduction was a "vital element" in the growth plan.
But Labour leader Ed Miliband said spending cuts would make it harder for the next generation to stay in school, go to university or own their own home.
BBC political editor Nick Robinson says Mr Clegg's message reflects the pressure on the government after data showed the economy shrank by 0.5% in the last three months of 2010.
He adds there is growing anxiety within the coalition that its deficit reduction plan is not, in itself, enough to drive economic growth.
Labour have said ministers are focused solely on cutting spending, while outgoing CBI boss Sir Richard Lambert has said the coalition has failed to set out a vision for the long-term future of the economy.
But in a speech in Rotherham, South Yorkshire, Mr Clegg argued that the government had inherited crippling debt and a "failed economic model" fuelled by debt and reliant on financial services.
"We are determined to foster a new model of economic growth, and a new economy - one built on enterprise and investment, not unsustainable debt," he said.
"If the coalition government simply pays off the deficit, but leaves the underlying economy unchanged, we will have failed."
Mr Clegg said 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".
He added: "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."
He said reducing the deficit was "a vital element in our growth plan" and handing on debt to future generations was "little short of intergenerational theft".
Mr 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, adding: "Things are difficult, but it is not all doom and gloom."
The deputy prime minister outlined the government's ambition to spread economic activity across the whole country and encourage "green" sustainable growth.
Speaking to the BBC, he highlighted four key elements of the government's new economic model: weaning the UK off debt-financed growth; investing in infrastructure, skills and education; boosting competitiveness by reducing the regulatory and tax burden and opening up markets; and balancing growth across different regions and sectors.
On a visit to Gateshead, Mr Miliband said the UK had its own version of the "American dream" - that each generation will enjoy more opportunities than the previous one.
Speaking ahead of the speech, the Labour leader, who hosted a meeting of his shadow Cabinet in the north-east, said: "The problem is that the government has no plan for growth. The Confederation of British Industry have said they've no plan for growth, and actually they're kicking away the ladders from young people in this country who are the future growth of our economy.
"When you're abolishing plans to help young people back to work who are unemployed, or trebling tuition fees, then you don't have a plan for growth, you're kicking away those ladders."