Clegg braces Lib Dems for another tough year

By Alex Stevenson

The coalition's economic rescue mission is not over yet, the deputy prime minister has told Liberal Democrat party members in his new year's message.

Nick Clegg used a short video clip to underline the importance of persevering with the government's politically unpopular austerity agenda for the "good of our country".

His party has suffered more than the Conservatives in opinion polls and elections held since the formation of the coalition.

Poor economic growth, which Lib Dems believe is preventing their party from recovering its popularity, is set to continue in 2012. The Chartered Institute of Personnel and Development (CIPD) predicted that unemployment would rise to 8.8% next year.

"What we're doing as a party, and as a coalition, it's not easy, but it's right," Mr Clegg told party members.

"We are putting the interests of the country first, and we have taken the first steps towards building a fairer, greener and more liberal country.

"We have worked flat out to restore confidence in the economy and started to transform Britain for the better. It's an ambition of which we should be proud."

He said the government would press ahead with plans for a Green Investment Bank, a youth contract scheme to boost apprenticeship numbers and "major investment" from the Regional Growth Fund.

Mr Clegg insisted that Lib Dems in government had made the right long-term decisions for the "good of our country" in the last 12 months, despite acknowledging that the coalition had not yet dealt with the "economic problems we inherited".

He claimed that Britain had been pulled "back from the brink" and avoided the financial catastrophe suffered by many European states in 2011.

"We only need to look at what is happening in countries on our European doorstep to see what we could have ended up dealing with in 2011," he added.

"But that economic rescue mission is not over yet and there is much more we must do. That's why, thanks to the Liberal Democrats, the government has been helping people get through these difficult times with measures to make life fairer and easier."

He cited the increased income tax personal allowance, the pupil premium and the increase in the state pension as Lib Dem achievements in government.

Moves to rebalance the economy "away from the City of London towards stronger, more sustainable growth" are unlikely to address the unemployment problem, however.

The independent Office for Budget Responsibility predicted unemployment would hit 8.7% in 2012, but the CIPD has offered a worse forecast. It suggested public sector job losses would not be made up for by increased growth in the private sector.

Mr Clegg concluded: "There are no easy years when you are in government, and we have had to show real strength in 2011.

"The next year will be one that poses many great challenges for everyone in Britain, but I know we must continue to do what's right for our country. And with that, I wish you all a very happy new year."