Page last updated at 16:39 GMT, Monday, 9 February 2009

Clegg unveils spending priorities

Nick Clegg
Nick Clegg says the Lib Dems are prepared to make tough choices

The Lib Dems have outlined plans to spend billions more on childcare and schools by scrapping tax credits for families on above-average incomes.

The party will redirect 7bn from current government budgets to widening access to childcare and increasing school spending for the poorest.

This will be paid for by cutting some spending programmes and removing tax credits from about 2.5 million people.

Leader Nick Clegg said its focus on priorities required "tough choices".

Cutting waste

The Lib Dems believe they can cut 20bn in "wasteful" government expenditure, instead putting the money towards pledges such as scrapping tuition fees and making childcare available to every child under 18 months in England.

Other commitments include helping schools have the choice of cutting infant class sizes to 15 and raising school spending per pupil for the most disadvantaged children in England to equivalent levels in the private sector.

We don't think voters at the next election will be tolerant of any political party which makes big, bold promises without spelling out the price tag
Nick Clegg

Identifying where the first 7bn in savings would come from, Mr Clegg said his party would focus its spending on the "kind of things people really need at a time of recession".

The party plans to raise 3.2bn by abolishing tax credits for better-off households, a measure which would affect about 2.5 million people.

They did not say at what income level the credits would be withdrawn, saying this would depend on factors such as the number of children and the cost of childcare.

Other proposed savings include cutting 980m from the roads budget, scrapping the Child Trust Fund - which would raise 300m - and ditching plans to extend the school leaving age to 18, which the party says will save 300m.

A further 500m would be raised by slashing the government's advertising budget and reducing IT costs.

Mr Clegg challenged the government and the Tories to be upfront about their spending plans and how they would be paid for.

Tax battle

"We recognise that we are now in the midst of an economic crisis which will leave a legacy of austerity in public finances and lean years in public finances for years and years to come," he said.

"That is why we don't think voters at the next election will be tolerant of any political party which makes big, bold promises without spelling out the price tag."

The Lib Dems have committed themselves to using any money left over after meeting their spending priorities to cutting income taxes for those on middle and low incomes.

Mr Clegg won an internal battle at last year's party conference to put forward a tax-cutting agenda at the next election.

But BBC political correspondent Iain Watson said Mr Clegg's internal critics - who fiercely opposed the move - will be pleased that none of the 7bn of savings highlighted on Monday will be devoted to cutting taxes.

The Lib Dems have attacked Labour's response to the downturn, saying ministers have wasted billions on ineffectual measures like the VAT better spent on boosting public housing and transport.

Labour says the Lib Dems' plans are confused and its ambition of cutting both spending and taxes is not credible.

Lib Dem pledge to cut class sizes
05 Feb 09 |  Politics
Why Clegg changed tack on tax
17 Jul 08 |  Politics
Clegg joins attack on VAT 'waste'
03 Jan 09 |  Politics

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