Election 2015: Nick Clegg sets out Lib Dem deficit plan

Nick Clegg has set out Lib Dem plans to eliminate the deficit by 2017/18, insisting there is "light at the end of the tunnel" .

His party would cut less than the Tories and borrow less than Labour, he said.

Lib Dem economic plans have "a heart as well as a brain", he added.

It comes as the Tories announced plans to cut inheritance tax on family homes and Labour said it would ramp up fines on tax avoiders.

The Lib Dems say they would get rid of the deficit through raising taxes by an additional £12bn, cutting public spending by £12bn, and cutting welfare by £3bn.

The Conservatives described the announcement as "further evidence that a vote for the Lib Dems is a vote for higher taxes".

'Fairer society'

Mr Clegg challenged the other parties to spell out in similar detail how they would balance the nation's books.

He acknowledged that the two years following 7 May's general election would not be easy.

But he claimed that the Lib Dems were the only party offering a "balanced" programme to pay down the remaining deficit, while still finding money to raise income tax thresholds to £11,000 and invest in the NHS.

"We are going to spread the burden of finishing the job of fixing the economy fairly across society," he said.

"Yes that means more cuts, but it also means asking the wealthiest to pay their fair share too."

The Lib Dem plans involve finding £3bn savings from the welfare budget, including "savings which ask wealthy pensioners to make a small sacrifice", he said.

Universal credit will be adjusted, and the rate of increase of benefits will be "restrained", he added.

The Lib Dem deficit-reduction plans include:

• Removing winter fuel payments and free TV licences from wealthy pensioners, saving £125m

• Keeping the 1% cap on working-age benefit rises for the next two years, raising £160m

• Abolishing tax breaks for workers who give up employment rights, to raise £200m

• Placing new restrictions on capital gains tax worth £700m

• Aligning dividend tax rates with income tax for higher and top rate taxpayers, bringing in £1.2bn

Mr Clegg said: "We have a plan to build a stronger economy and a fairer society, which means we will cut less than the Conservatives and borrow less than Labour.

"It's a plan to protect our economy and invest in our schools, hospitals and public services... a plan with a heart as well as a brain."

He added: "I can't promise you the next two years will be easy. Your hard work and sacrifice has turned our economy around, but there is still a job to finish.

"But, with the Liberal Democrats, there is light at the end of the tunnel and the only way to continue the balanced approach that the coalition has taken is to put Liberal Democrats in government again."

A Conservative spokesman said: "Today just serves as further evidence that a vote for the Lib Dems is a vote for higher taxes - which is exactly what Labour want too.

"Only the Conservative Party are committed to cutting taxes so people keep more of the money they earn."