Chief secretary to the Treasury Danny Alexander has set out an alternative fiscal plan for the next parliament.
The Lib Dem minister said the 14-page document – called An Alternative Fiscal Path beyond 2016/17 – proved the “books could be balanced” with £70bn less in borrowing than Labour proposed and £50bn fewer cuts than the Conservatives were planning.
However, he confirmed that last week’s Budget was agreed by the Lib Dems and contained many of the party’s policies.
Mr Alexander said: “I know that millions of people who watched yesterday’s exchanges between the chancellor and the leader of the opposition were left wondering, ‘Isn’t there another way to do this?’
“Of course, people want a stronger economy based on a credible plan, but they also want a fairer society based on modern public services.”
Speaking in parliament, he said he was setting out “a better economic plan for Britain, a plan that is based on values of fairness as well as strength”.
He told fellow ministers this was “a plan that delivers on our commitment to balance the books in a fair way, a plan that borrows less than Labour, cuts less than the Conservatives and enables our country to see light at the end of the tunnel”.
The Lib Dems said they would aim to eliminate the deficit by 2017/18 through £30bn of spending cuts and tax rises.
But his Labour opposite number Nottingham East MP Chris Leslie branded the announcement a “farce” and said Mr Alexander had wasted civil servants’ time.
Ben Brettell, senior economist at Bristol-based Hargreaves Lansdown, said: “The economy is sure to be a key battleground in May’s election, and there is plenty of evidence to suggest it is on the right track.”