Clegg sees light at end of tunnel for economy as he takes charge

Mr Clegg, "holding the fort" in Downing Street while David Cameron is on holiday in Cornwall, claimed the Government had taken the right decisions in the national interest – even if they were unpopular.

The Sheffield Hallam MP said the coalition was proving to have a "strong sense of purpose" rather than being the "insipid mush" many had predicted as he warned it would take the full, fixed five-year duration of the Government to repair the economy. But he added: "I think there is light at the end of the tunnel.

"There's so much gloomy news out around, I think there are some glimmers of better news.

"I hope when the five years are up people will see that we have taken difficult decisions, some controversial ones, some unpopular ones, but we have done it for the right reasons in order to get the economy right, get growth going again and give people a sense of hope for the future again."

Mr Clegg, answering questions submitted over the internet during a town hall-style event in London, said the measures taken to bring down the deficit could not be "ducked" due to the economic turmoil in Europe and the pressure exerted by the markets.

It was also "morally wrong" to continue to build up debt.

"There's nothing fair or socially just about handing on debt from one generation to the next.

"Someone had to draw a line and say 'no, we're going to sort this out' because you can't create growth, you can't create a fair economy on the sands of debt."

But he accepted Ministers may have failed to spell out the reasons behind the tough tax and spending measures contained in the Budget and acknowledged there had been lengthy deliberations within Government before the VAT increase was agreed.