Nick Clegg warns of 'long, hard road' on economy

Britain faces a "long, hard road" to economic recovery, deputy prime minister Nick Clegg has warned.

In his speech to the Liberal Democrat conference, the deputy prime minister insisted the government would not perform a U-turn over spending cuts.

The squeeze was tough but right, he said, adding that ministers could still "do more" to boost growth.

Labour accused Mr Clegg of "sacrificing liberal tradition for personal ambition" by joining the coalition.

The International Monetary Fund has cut its UK growth forecast and warned of a "dangerous new phase" for the global economy.

'Not enough'

Mr Clegg's 42-minute speech brought to a close the five-day Lib Dem conference in Birmingham, which has seen ministers repeatedly stress that the coalition remains united on its deficit reduction plan.

Adopting a sombre tone, he said the economy was the government's biggest concern, adding: "The recovery is fragile. Every worker, every family knows that. There is a long, hard road ahead."

Mr Clegg said deficit reduction had protected the economy and laid "the foundations for growth", but added: "On its own it is not enough. That's why we are already investing in infrastructure, reducing red tape, promoting skills, getting the banks lending.

"But 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 jobs."

The Treasury has denied BBC reports that ministers are considering a £5bn rise in spending on infrastructure to kick-start the economy.

Aides stressed that Mr Clegg was not suggesting anything in his speech which would alter the government's deficit reduction strategy but said he was pointing to a growth review report, due in November.

The deputy prime minister said global financial turbulence showed that the "painful" spending cuts strategy was "essential to protect the economy" and that, while it would have been easier not to enter into the coalition, it "would not have been right".

"You don't play politics at a time of national crisis, you don't play politics with the economy, and you never, ever, play politics with people's jobs," Mr Clegg said, in a speech containing few jokes.

'Too little, too late'

The Lib Dem leader became more animated as he attacked Labour's record in power, saying it had left the UK "teetering on the edge of an economic precipice."

And he rejected Labour's argument that the government is going too far, too fast on spending cuts, arguing that the alternative would be "too little, too late".

In a jibe at opposition leader Ed Miliband and shadow Chancellor Ed Balls - both of whom worked for Gordon Brown when the was chancellor - he said it was time for "real leadership. This is no time for the back room boys".

But Mr Clegg's speech contained little criticism of the Conservatives - who have been the brunt of many jokes from other Lib Dem MPs during the conference.

He said his party was "in nobody's pocket", while arguing other parties had served "vested interests" - from unions to bankers, to long applause from the hall.

The Lib Dems have faced an onslaught of voter anger over the past year, over the U-turn on tuition fees and support for spending cuts - and saw a long-cherished dream of changing the UK voting system dashed, when the AV referendum resulted in a resounding "no" from the electorate.

Mr Clegg acknowledged the party had been "vilified" by both the left and the right and paid tribute to members' "resilience" and "grace under fire".

The party's "character" had been tested, he said, but it had "come out fighting" on the NHS, on protecting human rights and "fighting for every family".

'Stopping bad things'

He said the decision to support the rise in university tuition fees was "the most heart-wrenching for me".

But he said Lib Dem ministers were making a difference, on banking reform, green jobs and easing the tax burden on the lower paid.

The party had been right to challenge NHS changes, he said, adding the Human Rights Act was "here to stay" - the Conservatives had pledged to axe when they were in opposition.

Mr Clegg told party members that being in government was not just about "stopping bad things, but doing good things".

He announced a £50m summer school scheme, to help children who need it catch up in the maths and English before going to secondary school.

For Labour, shadow education secretary Andy Burnham said: "People will not be fooled by Nick Clegg's rewriting of history and desperate self-justification. His actions speak for themselves."

He added: "He and his Lib Dem ministers have sacrificed their liberal tradition for personal ambition. They share the responsibility for stalling the recovery and damaging the life chances of the next generation."