Clegg: 'Britain Needs New Economic Model'

Nick Clegg has said if the Government cuts the deficit but does not also transform the underlying economy, it will have failed.

The Deputy Prime Minister delivered a speech setting out his vision on how the Government will rebalance the economy.

But at the same time, Labour party leader Ed Miliband, said the new generation will find it harder to get an education, find a decent job and own a home than their parents did.

Mr Clegg also defended the Coalition against the opposition's accusation it does not have a strong enough plan for boosting growth.

Speaking in Yorkshire, Mr Clegg said the Government was trying to create a new model for the economy, based on enterprise and investment.

He said ministers are investing in services, including transport and the supply of skills and education that businesses need, while weaning the country off debt-financed growth.

Mr Clegg also talked about boosting competitiveness by getting rid of red tape and opening up markets.

And he said the Government is balancing investment in different regions and sectors, instead of "putting all the country's economic eggs in one basket".

While this is supposedly new strategy being put forward but there this is not all new in terms of content - much of it is similar to what David Cameron said in Davos, at the World Economic Forum, last week.

But what is noticeable, is how much the coalition are beginning to pile the blame on Labour.

Mr Clegg said they did not just inherit a debt from the last Government, they inherited a broken economic model.

"If the coalition Government simply pays off the deficit, but leaves the underlying economy unchanged, we will have failed," he will explain.

"We are not in government simply to clean up Labour's mess. We are in government to lay the foundations of a better, stronger economy."

This approach is no surprise now Ed Balls has replaced Alan Johnson as shadow chancellor - Mr Balls worked very closely with Gordon Brown, and is likely to provoke a number of veiled digs at that adminstration.

One barbed swipe at Labour is the promise not to announce initiative after initiative, but instead take the time to consult experts and investors.

Labour has accused the Tories and Liberal Democrats of having no "plan B" for the economy and stifling growth their austerity programme.

In his own speech, Mr Miliband said his party would champion the aspirations of the working and lower-middle class families that want a better future for their children.

The UK version of the "American dream" is the "British promise", he explained, which he said represents the expectation that the next generation will do better than the last.