Nick Clegg: A liberal vision from rescue to renewal

But I’m under no illusion that no one is going to vote for us in 2015 out of gratitude for what we did in 2010, in exactly the same way that no one will vote for us just because we’ve stuck it out, through thick and thin. In short, people will vote for us next year not only because of our record of delivery, but also because of our promise of more.

And the way I see it is like this: if this five year parliament was about rescuing the British economy, the next will be about renewing it. If this parliament was about reviving the economy, the next will be about rewiring the economy so that it embodies the values of fairness and opportunity, making Britain a place where every person really can get ahead.

And having played our part in the rescue, if we want to play our part in the renewal, we need an answer to the most central question in next year’s election. Simply put: who can be relied upon to balance the books, look after people’s money, avoiding the mistakes of past, while still investing in the things people need to succeed? And unless you have a good answer to that, no one should or will listen to a word you say.

First and foremost we have to lighten the burden of debt on our children and grandchildren. There is nothing remotely liberal or fair in handing on sky high debt levels to future generations. All you’ll end up doing is asking those generations to pay billions in interest payments as they service our debts instead of investing in their needs. A lot of people assume that we’re already paying off our debts. We’re not. The truth is that so long as we have a deficit the total debt pile still goes up. Next year Britain will owe around £1.4 trillion in debt. Paying the interest alone will be the government’s third biggest item of spending, after social security and the NHS. For that money you could build around 6,000 new schools. You could increase the NHS’s budget by more than a half.

And that is why, because of the liberal belief in giving future generations every chance to succeed, we will abide by a new debt rule in which we will significantly reduce national debt as a percentage of GDP, year on year, when growth is positive, so that it reaches sustainable levels around the middle of the next decade.

In other words: so long as the economy is in a good state, we’ll get debt down to safe levels, at a sensible rate.

Once we’ve dealt with the deficit in 2017/18, we’ll balance the overall budget but we’ll do it in a way which still allows us to invest in the things we and future generations need. So a second, balanced budget rule, in which we run a cyclically adjusted balanced total budget, excluding capital spending that enhances economic growth or financial stability.

What does that mean? It means future governments will have to live within their means and the money we spend on public services will grow roughly in line with the growth of the economy as whole. But we will allow for one significant exception: government will be able to borrow in order to fix our creaking national infrastructure. Because no one looking at Britain’s prospects for the future can overlook the fact that we are relying on roads, railways, an energy network and a housing supply which simply will not be able to support the aspirations and ambitions of future generations. Our railways are a throwback to the 1970s. We rely on water and waste networks from the 19th Century. We have some of the most congested roads in Europe. And if we are to meet our generation’s challenge to decarbonise our economy and prevent a climate crisis, almost all of this – from our energy networks to our homes – needs to be replaced or renewed with the newest technologies.

The coalition Government has made a good start in this parliament but it will take a very long period of sustained effort and investment to get the quality of infrastructure we need. That’s why I’ve said the next parliament must move us from rescue to renewal. And we cannot build a stronger economy and a fairer society where there are opportunities for everyone unless we are prepared to put our shoulders to the wheel and use the muscle of the state – if necessary through borrowing – to rewire and revamp our infrastructure.

Nick Clegg is Deputy Prime Minister and Leader of the Liberal Democrats who delivered a speech entitled ‘Opportunity for Everyone’ yesterday. This is an edited version.