The Liberal Democrats have set out plans to cut spending, including a pay freeze for public sector workers and scrapping a series of defence purchases.

In a pamphlet published by Reform, Vince Cable said there should be no "ring fenced" areas of public spending.

And the Lib Dem Treasury spokesman said there should be a "fiscal consolidation" of eight per cent over five years.

The emphasis should be on controlling spending rather than raising taxes, he added.

"The time for generalities is over," said Cable.

"Instead, we need serious proposals for cutting public spending and tackling the UK's budget deficit.

"The priority is to move the economy out of recession but there is also a need to restore fiscal credibility and to allow government to focus its resources where are they are most needed.

"We need to debate when, how and where the cuts will come."

The Lib Dems said they could save £2.4bn by implementing a policy of zero growth overall for public sector pay.

There would also be a 25 per cent reduction in the total pay bill of staff earning over £100,000.

Tapering the family element of the tax credit would save £1.35bn, said the party, while IT projects including the identity cards scheme, the NHS IT programme and Contactpoint would be ditched.

Regional development agencies and NHS strategic health authorities would be scrapped.

In defence, Eurofighter tranche three, the A400M, the Nimrod MRA4 and the defence training review contract as well as the Trident replacement would all be axed.

Cable said that "asking the British public for their vote at the next election means being upfront from the outset about what government should and should not be spending its money on".