I have spent this weekend at the Lib Dem Conference in Liverpool. It has been an upbeat event, the first in a lifetime that has been addressed by Lib Dem ministers, but a serious one too, as is right given the continued challenges faced in putting right the legacy of Labour’s economic mismanagement, that has left us, as a nation, borrowing £1 for every £4 the government spends. Or to put it in more local terms £750m just to pay this year’s government grant to Birmingham City Council.

I am convinced the national economic strategy the coalition is following is right. Bear in mind that 80% of the cuts in public spending are cuts Labour would have made anyway. And the extra cuts, the Coalition will make, mean both that the structural deficit will be cleared within 5 years instead of 8, and that the interest rates we must pay have fallen as international investors have regained confidence in our plans.

The combined impact of lower borrowing and lower interest rates, compared to Labour’ plans, means that by 2015 we will be paying vastly less interest on the national debt, and consequently able to spend more on public services, than would have been possible under Labour. Labour would lead us down a route that would force our children to pay more of their taxes on debt interest and less on education and social welfare, just to make good our debt financed spending. There is nothing progressive in such a policy.

The other big benefit of low interest rates is the huge stimulus they provide to our economy. I am confident that the combination of a low exchange rate and historically low interest rates will make Labour’s talk of a double dip recession look like a bad misjudgement, and will provide the basis of sustainable growth during this parliament.

Of course, as Vince Cable said to a meeting I attended, we are still in the midst of the banking crisis and we must be ready to adjust monetary and fiscal policy if the global economic picture changes. That is wise, but he is confident we are tackling the mess we were left with by Labour in the right way, and I agree.