Page last updated at 10:22 GMT, Monday, 22 March 2010

Lib Dems call for cross-party deficit plan

Nick Clegg
Nick Clegg wants cross-party cooperation on the budget deficit

The Liberal Democrats have called for the formation of a cross-party "council for economic stability" to plan cuts in the budget deficit.

Party leader Nick Clegg said the body would seek to timetable a reduction in the deficit outside of "narrow political interests".

He also accused Labour and the Conservatives of focusing too heavily on when to cut rather than what to cut.

The annual budget deficit is forecast to hit £178bn this year.

The new council would consist of the chancellor, shadow spokespeople from major political parties, the Bank of England governor and the head of the Financial Services Authority (FSA).

"The purpose would be to force the politicians to put the long-term national interest ahead of their narrow political interest and agree the basic timetable and scale of deficit reduction in the years ahead," Mr Clegg said.

He added that a cross-party framework was essential because any deficit reduction plan would take more than a single parliament to complete.

Mr Clegg, who was speaking at the London Stock Exchange, repeated the pledge to make £15bn of savings annually from 2011 onwards, with £10bn going towards deficit reduction.

In the pre-Budget report last year, the chancellor Alistair Darling committed Labour to reducing the deficit by half over four years, starting in 2011.

Meanwhile the Conservatives say they will make a start on cutting spending immediately if they win power, arguing that the deficit could seriously affect future economic growth.

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