Clegg: No change of course on deficit reduction

The government is "absolutely not going to change course" on reducing the deficit, Deputy Prime Minister Nick Clegg has insisted.

The Latest GDP figures showed the UK economy shrank by 0.3% in the last three months of 2012, fuelling fears the economy could re-enter recession.

Mr Clegg said the government was "resolute" and "restlessly creative" in finding ways to make the economy grow.

He insisted the coalition had already reduced the deficit by a quarter.

He also said the government was finding new ways to boost capital investment, but warned against a return to the "bad old days" of extensive borrowing.

Mr Clegg's comments come amid rising calls for a new economic strategy in the face of the GDP contraction and figures showing a slight year-on-year increase in public sector net borrowing.

Last week, IMF chief economist Olivier Blanchard suggested that Chancellor George Osborne should consider slowing down austerity measures in his March Budget, and London mayor Boris Johnson urged his Tory colleague to "junk talk of austerity" and press ahead with major infrastructure projects.

'Being tough'

The deputy prime minister told the BBC's Andrew Marr show: "You can be very tough on the deficit, which we have - we have reduced it by a quarter - and you can be restlessly creative about how, within those strictures, you do things to make the economy grow.

"We're being tough, but pragmatic. We are being resolute, but innovative. If people have ideas about how we can provide further capital investment into our infrastructure, without breaking the bank, of course we are open to that.

"We are absolutely not going to change course in paying off one of the world's largest budget deficits."

Mr Clegg defended comments he made in a magazine interview in which he appeared to suggest the coalition government had cut capital spending too much when it came into office.

"What I was describing is what is the fact... what we did in the first instance, Labour said there was no money left so we couldn't go around writing cheques," he said.

"What we have done since then is systematically found ways to raise new capital."

He highlighted Crossrail - a new rail line which will run from east to west London - as one of the largest infrastructure projects in Europe and said Monday's expected announcement to extend the £33bn high-speed rail line to Manchester and Leeds would "heal the north-south divide".

'Arcane debate'

Asked about the prime minister's promise of an in/out referendum on the UK's membership of the European Union if the Conservatives win the next election, Mr Clegg said it was "not in the national interest" and could jeopardise Britain's economic recovery.

"My priority will always remain a simple objective of building a stronger economy in a fairer society, enabling everybody to get on in life," the Liberal Democrat leader said.

"And I think that job is made more difficult if you have years and years of tying yourself up in knots, having arcane debates about the precise terms of the membership of the European Union before we get to a referendum.

"You must always, when you are trying to piece together a recovery, foster those precarious conditions of greater confidence in the economy, you mustn't do anything to make that more difficult."

Conservative Europe Minister David Lidington defended the prime minister's position, telling the BBC's Sunday Politics that closer integration between eurozone countries following the eurozone crisis would have consequences for non-euro members, which needed to be addressed.

He said David Cameron had "no secret plot" to get the UK out of the EU, but wanted to remain a member of a reformed institution that was more competitive and flexible.

Labour's deputy leader Harriet Harman attacked Mr Clegg for "joining David Cameron in his failed economic plan, in cutting 5,000 nurses and 15,000 police, and in trebling tuition fees and increasing VAT after promising not to do so".

"His record is the Tory record - one of failure - and it is on this he'll be judged at the election," she added.

UK Independence Party leader Nigel Farage accused Mr Clegg of acting in his own party's interest on Europe, adding that "he has no interest in letting people have their say".

School choice

In a wide-ranging interview, Mr Clegg also said he backed British support for the French military intervention in Mali, where forces are fighting against Islamist rebels, but added that Britain could play a key role once the conflict is over.

"It's the aid, it's the help to organise free and fair elections - because it's political stability after the military phase that is actually the best antidote against extremism," he said.

Mr Clegg also accepted that he would face "public commentary and criticism" over his forthcoming decision whether or not to send his elder son to a private or state school.

"But I hope in the meantime we want to protect the privacy of an 11-year-old boy and make a decision that we think, as parents, is best for our son," he added.

Last year, Mr Clegg said the inequality between private education and the state sector was "corrosive for our society and damaging to our economy".

In his radio phone-in last week, he indicated that he would prefer to choose a state secondary this autumn but that there was "huge competition" for places in London.