UK Politics

Lib Dems deserve credit for economic recovery - Alexander

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Media captionMr Alexander said: "Anyone who claims that better economic news is all down to the Conservatives is just plain wrong"

The Liberal Democrats deserve credit for seeing the economy through its "darkest hour" and on the road to recovery, a senior minister has said.

Treasury secretary Danny Alexander claimed the Lib Dems' "pragmatism" in resisting calls for deeper cuts ensured there is a "brighter future" ahead.

Mr Alexander has insisted the coalition will last the distance after Vince Cable said it may break up early.

But he said neither the Tories nor Labour could be trusted on their own.

In his speech to the annual conference later, Mr Alexander struck a more emollient note than the business secretary about the Lib Dems' coalition partners - after Mr Cable accused the Conservatives of "ugly" politics on issues like immigration and welfare.

'Siren voices'

But the Lib Dem minister, George Osborne's number two in the Treasury, claimed it is "wrong" for the Conservatives to claim primary credit for the nascent economic recovery and his party must shout about their contribution "from the rooftops".

"We have seen the economy through its darkest hour by ensuring the coalition's economic plan is pragmatic," he said.

"When the eurozone crisis was raging, when our growth forecasts were going backwards, siren voices on the right called for us to respond by cutting further and faster. It was the Liberal Democrats who ensured the coalition remain anchored in the centre ground.

"The decisions we have implemented in government. The brighter future that lies ahead is only there because of us."

Mr Alexander hailed improvements in business confidence and a rosier picture for manufacturing and the jobs market as evidence of an sustained upturn and said plans to help aspiring homebuyers get access to loans would go ahead despite concerns of a housing bubble.

Tax vs spend

Despite a return to growth, Mr Alexander will say tough decisions on tax and spending will be needed to meet the government's target of eliminating the structural deficit by 2018 and, even after that, the UK must not "go back to the old bad habits".

"It will be another five years shaped by the necessity of fiscal restraint," he said of the 2015-2020 period.

The Lib Dems have said a further £26bn will have to be found between 2016-18 in the form of additional spending cuts or tax rises to enable the government to balance the books.

Chancellor George Osborne has said he does not envisage any further tax rises after 2015, implying the fiscal consolidation will be achieved entirely through spending cuts.

Speaking to the BBC ahead of his speech, Mr Alexander said there were areas where spending could be cut and "of course it might be possible to do it all through spending reductions but that might drive you into choices I don't agree with".

The Lib Dems have already proposed a series of tax changes - including a levy on properties worth more than £2m and capping tax relief on £1m pension pots - which they have said would raise about £5bn.

'Fairly shared'

In his speech, Mr Alexander announced further measures to crack down on tax avoidance, by closing "loopholes" allowing shareholders in private equity firms to take out money without paying tax and for limited partnerships to reduce their tax liabilities.

The tax authorities, he added, would be going after "a minority of rogue" landlords - often those with multiple properties or student landlords - who are not paying the full amount of tax owed on rental payments, suggesting they owed £500m to the Exchequer.

But the party has dismissed suggestions it is considering raising taxes on those earning more than £50,000 after an internal briefing note accidentally sent to journalists suggested this was being looked at.

"I don't know where it came from," Mr Alexander told BBC Radio 4's Today programme. "It does not reflect any of the proposals we have been discussing,"

He added: "The priority we have in taxation is asking more of the wealthiest in society.

"The reason for having extra tax rises is... because you want the burden to be fairly shared and the extra tax rises make sure the wealthy are making a contribution - those people do not consume so much public spending so you have to have tax to continue to get the fairness mix right."

Coalition future

Mr Alexander insisted the Lib Dems were not going to "walk away" from the coalition in the months leading up to the election - a move some activists believe would enable it to assert its independence and increase its chances or retaining seats.

Mr Cable has said a separation of the ways before the election was one of the "possible" outcomes - but stressed any decision could only be taken by leader Nick Clegg in consultation with his party.

While the Conservatives' tone on immigration was "harsh" and even "prejudicial", the two parties should be able to "rise above" their differences and focus on shared priorities. Mr Alexander added.

"This coalition will continue until the end of this Parliament, as we promised, for the very simple reason that we have a very big job to do to clean up the economic mess that Labour left behind and to entrench the recovery that we are starting to see," he told Sky News.

On the fourth day of the conference, activists have also been debating the situation in Syria - although they did not hold a vote - efforts to reduce cases of sexual and domestic violence and future defence policy, including Trident renewal.