Clegg Backs Osborne Deficit-Reduction Timetable for U.K.

U.K. Deputy Prime Minister Nick Clegg said his Liberal Democrats back the timetable set out by Chancellor of the Exchequer George Osborne to end the structural budget deficit by 2018.

The opposition Labour Party, which may need a coalition with the Liberal Democrats to form a government after the next election in 2013, has pledged to end new borrowing except for investment by 2020.

“In the Autumn Statement we set out a plan to get debt falling as a proportion of GDP by 2016-17 and to get the current structural deficit in balance a year later,” Clegg said in a speech in London this evening. “That is the right timescale and the one to which the Liberal Democrats remain absolutely committed. If I am in government again, this is the plan I want us to stick to.”

Clegg said an objective of the next government should be to “get debt down to sensible levels.” While he didn’t specify what that level would be, it implies either further spending cuts or tax rises. Elsewhere in the speech, Clegg said he believed spending on public services should grow in line with the economy.

“Increasingly our debt is held by overseas and institutional investors in an ever more competitive global environment,” Clegg said. “Britain simply cannot rely on servicing very high debts as easily as we have done in the past.”

The deputy prime minister also emphasized differences with his current coalition partners, the Conservatives. He repeated a commitment not to agree to 12 billion pounds ($20 billion) of cuts to welfare spending.

Before it's here, it's on the Bloomberg Terminal.