Lib Dems committed to coalition, cuts

BIRMINGHAM, England Wed Sep 21, 2011 3:09pm BST

Nick Clegg, leader of the Liberal Democrats listens to a speech from Business Secretary Vince Cable during their annual autumn conference, in Birmingham, September 19, 2011. REUTERS/Darren Staples

Nick Clegg, leader of the Liberal Democrats listens to a speech from Business Secretary Vince Cable during their annual autumn conference, in Birmingham, September 19, 2011.

Credit: Reuters/Darren Staples

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BIRMINGHAM, England (Reuters) - Deputy Prime Minister Nick Clegg underlined his Liberal Democrats' commitment to coalition government with the Conservatives and their flagship austerity plan when he closed his party conference on Wednesday.

The state of the flagging economy overshadowed the five-day meeting, quietening restive grassroots delegates and keeping ministers firmly in line behind a four-year programme of spending cuts to eliminate a budget deficit.

The International Monetary Fund on Tuesday slashed British growth forecasts, and many fear a return to recession.

"Let me tell you this: You don't play politics at a time of national crisis. You don't play politics with the economy. And you never play politics with people's jobs," Clegg told the conference.

Lib Dem ministers said the economy faced a long, slow road back to growth, with Business Secretary Vince Cable telling the conference that Britain faced a crisis that was the "economic equivalent of war."

Cable called for the Bank of England to add further stimulus by reopening its quantitative easing programme of buying assets as a way to boost lending, a move the bank on Wednesday signalled it was prepared to make.

The Lib Dems focussed on plans to boost growth and outlined initiatives to boost infrastructure spending, but officials insisted that did not mean new money had been found, only that existing funds would be deployed faster.

"The outlook for the global economy has got worse. So we need to do more, we can do more, and we will do more for growth and for jobs," Clegg said.

Lib Dem officials were emphatic that Clegg's comments did not signal a departure from coalition austerity plans.

"There's absolutely nothing here that you should interpret as a hint or a thought or a nod and a wink that there is anything other than complete coalition unity around the central question of deficit reduction," a Lib Dem source said.

Senior party member David Laws, a close ally of Clegg, said the coalition was correct to hold its line on the austerity plan despite concerns the economy may not grow fast enough to shrink the budget deficit.

"If you are going to deploy some important policy weapons you don't do so on the basis of one or two months of data," he told Reuters.

POLL SLUMP

The centre-left Lib Dems have paid a high price for joining their ideological opposites the Conservatives in government, with accusations of betrayal by many voters pushing the party's poll ratings to less than half of that when they came to power.

Out of power for decades, the Lib Dems had hoped the move would give them credibility by helping to fix the economy.

The Lib Dems were hammered in council elections in May, and a Reuters/IpsosMORI poll on Wednesday showed 65 percent of Britons regard the party as divided and only 16 percent see it as likely to keep its promises.

A reversal of the Lib Dems' pledge not to raise university tuition fees hit the party particularly hard, forcing Clegg and other Lib Dems to use the conference to justify the compromises they made to rule in partnership with the Conservatives.

"The easy thing would have been to sit on the opposition benches throwing rocks at the government as it tried to control the public finances. It might even, in the short run, have been more popular, but it would not have been right," Clegg said.

In a sign of coalition unity, Clegg's closing speech contained none of the anti-Conservative jibes that had pleased grassroots Lib Dems earlier in the conference, and he chose instead to reserve his fire for the opposition Labour Party.

In the absence of good economic news, Clegg and other Lib Dems have focussed on other policy successes and highlighted their role as a moderating influence on the Conservatives, who they say would have devised a less fair austerity plan alone.

"After being hit hard, we picked ourselves up and we came out fighting. Fighting to keep the NHS (National Health Service) safe. Fighting to protect human rights. Fighting to create jobs. Fighting for every family," Clegg said.

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