The Lib Dem leadership came to Docklands today to spell out their long-term plans for the economy.

Speaking at The Crystal, by Royal Victoria Dock, leader Nick Clegg and business secretary Vince Cable set the party the target of making the UK the largest economy in Europe by 2035.

That means overtaking France and and sustaining economic growth of more than 1% a year ahead of Germany.

Deputy Prime Minister Nick Clegg said: “We believe that by building a strong, modern, open economy we can become the powerhouse of Europe. We can grow faster than both France and Germany, overtaking them as the largest economy in Europe in 20 years’ time.

“That is hugely ambitious, but absolutely possible. To do it we need two things: to secure the recovery; and to put in place an ambitious long-term plan that harnesses and encourages the skills and dynamism of British workers and British businesses.”

Mr Cable said: “In government, our industrial strategy has laid the foundations to give business the confidence to invest over 10 or 20 years.

“The Liberal Democrats are on the side of business in creating an economy that is open to international students and the global skills pool our country needs to grow.”

The announcement comes at a time when the Lib Dems are languishing in the polls, showing an average figure of around 8%, behind Ukip and running neck and neck with the Greens.

Challenge for leadership

If translated into votes, the figures would see the Lib Dems lose a large proportion of their 57 MPs. Mr Clegg’s own constituency of Sheffield Hallam is under threat from a Labour surge.

A sizeable defeat would see Mr Clegg challenged for the leadership with Norman Lamb emerging as a possible contender this week. Party president Tim Fallon and Energy Secretary Ed Davey are also in contention.

At the east London policy launch in east London, Mr Clegg turned on his coalition partner saying that Prime Minister David Cameron’s ideological obsession with a small state threatened defence spending.

The Prime Minister is under pressure to make a manifesto commitment to meet the Nato target of 2% of GDP on defence. Insiders fear the manifesto will only pledge to maintain the head count and spending on equipment. At 1.88% of GDP, it would be the lowest level of spending for 25 years.

Mr Clegg said: “You cannot provide the British people with adequate resourced police forces, or an adequately resourced military forces if you take this ideological approach for no economic reason at all.

“At some point the Conservative Party has got to come clean. They cannot have their cake and eat it.”