David Cameron and Nick Clegg attempt to heal coalition wounds

DAVID Cameron and Nick Clegg are set to stress their continuing commitment to the coalition and the programme they agreed in 2010, in a bid to relaunch their battered alliance in the wake of last week’s local government elections.

• Prime Minister and Deputy to show united front after poor election showing

• Coalition can still be ‘united and coherent’

• Two parties are losing public trust, Labour claims

In a visit marking the second anniversary of their decision to form a coalition, the Prime Minister and Deputy Prime Minister admitted they had under-estimated the scale of the economic problems since their first joint joint appearance in the Downing Street garden in May 2010.

Both argued, however, that the “difficult” rebalancing of the UK economy away from a reliance on the City of London to one focused on manufacturing and exports was required, even if there was to be short-term pain.

Mr Cameron said: “It is tough, it is difficult. But these are the right steps we nee to take so that we don’t pump the bubble back up.” Copmparing the growth in the boom years of the 90s and early part of the 2000s to a “mirage”, he said: “We need one (an economy) that is built to last rather than build on sand.”

Mr Clegg claimed that the Government faced a “particular dilemma” in parts of the country like Scotland, Wales and the North of England where local economies had been “largely reliant” on subsidies funded by “the explosive growth in the City of London”.

“That was all fine as long as the money was there. That has gone,” he said.

Mr Cameron added: “The drivers of growth were completely unsustainable.”

The pair’s appearance at a tractor factory in Essex was billed as a “relaunch” of the coalition after both parties suffered devastating losses at last week’s Local Government elections. However, Government aides insisted it was simply a chance for the two men to re-state the Government’s priorities, amid internal disquiet about the direction they are taking.

Both men also sought to play down disagreements with new French President Francois Hollande. Mr Cameron said that Mr Hollande’s approach was “on a pathway with ours”, saying he too was aiming to end France’s deficit by 2017.

“Who’s going to disagree with someone wanting to grow our economies?” Mr Clegg said. But. he added that Mr Hollande knew it was impossible to build growth on the “shifting sands of debt.”

Quizzed on the Government’s plans to reform the House of Lords - a subject which has roused fury from the Government backbenches, Mr Cameron said it was “perfectly sensible” for the Government to “consider” the idea. He said he backed the principle of an elected upper House. However, both he and Mr Clegg hit back at claims the plans were a waste of precious government time, insisting it was perfectly possible for the Government both to examine reforms and to deal with economic problems.

Despite claims the Lib Dems are pushing the reforms onto the Government, Mr Clegg insisted he was far more interested in apprenticehips.