Nick Clegg has promised voters light at the end of the tunnel in three years, saying the Liberal Democrats are the only party promising to bring austerity to an end by 2017-18.

Launching his party’s economic programme for the next parliament at the Shangri-La hotel on the 52nd floor of the Shard in London, Clegg said the Lib Dems were eager to position themselves as the party of the centre ground.

He set out plans for £12bn of departmental spending cuts and £4bn of welfare cuts by 2017-18, and promised that the remaining £14bn of the deficit programme would be achieved by raising £8bn in tax rises and £6bn by cracking down on tax avoidance.

He was speaking alongside the chief secretary to the Treasury, Danny Alexander. Constituency polls in the past 48 hours have suggested both men could lose their seats at the next election, but Clegg dismissed the Survation poll in his Sheffield Hallam seat as “complete and utter nonsense”, saying it bore no relation to his experience on the ground.

Clegg’s package represents the clearest insight into how one of the main parties will approach the deficit in the next parliament. He said: “We will cut £38bn less than the Tories and borrow £70bn less than Labour.”

The Tory cuts amounted to the entirety of the schools budget, and would mean damage to the police, the army and social care, he said. Not a penny was being sought from the rich by the Conservatives to bring the current account into balance. The Labour approach was equally dismal, he said, arguing that Ed Miliband did not have a plan to erase the current deficit until the end of the parliament.

Clegg ruled out the need to raise income tax, national insurance, VAT or inheritance tax to reach £8bn tax rises, restricting his scope for manoeuvre. So far the Lib Dems have specified £2bn of the £8bn tax rises. He said: “The Conservatives see austerity as an end in itself they now see deep cuts not an economic necessity but an ideology desire to reduce the state.”

Clegg said the Conservatives would not be able to deliver their plans saying they were based on “kooky, made-up figures”. He said: “They have no idea how to pay for it, they know it is nonsense. They hope to have a reputation for hard-edged economic credibility, and they can get away with it without being challenged to come clean.”

Clegg and Alexander were wary of accepting that the balance of their plans was 40% tax rises and 60% spending cuts. They preferred to argue that the balance over the period starting in 2010 was closer to 75% spending cuts and 25% tax rises.

The new proportions are seen as a victory for the business secretary, Vince Cable, who does not see the task of fiscal consolidation in quite the same way as Alexander.

Alexander said: “That’s a balanced way of dealing with these problems. It’s saying that everyone should make a contribution, those with the broadest shoulders should pay the biggest share of the burden and that once we’ve achieved that, by the end of the financial year 2017-18, there’s light at the end of the tunnel, we can turn the corner as a country.

“Ten years on from the financial crisis we can say that the deficit is paid down and our public finances and the money we have to pay for public services and invest in infrastructure, that can turn the corner too.”

Clegg said Labour’s spending plans amounted to deficit reduction on the never-never, suggesting Labour had said it would only erase the deficit by the end of the parliament. He said that would allow Labour to borrow an extra £70bn, meaning £4bn extra in debt interest payments.

David Cameron rejected the Lib Dem plan on the grounds that it would involve “substantial” tax increases. Speaking at the launch of the government’s Northern Powerhouse economic plan for Yorkshire in Leeds, the prime minister dismissed his Lib Dem coalition partners and said the choice at the election was between Labour and the Tories.

“I don’t think it is right to have a plan that involves really quite substantial tax increases that would hit hard working people. I think what we need now is a plan that the Conservative party has set out which is to eradicate the remaining deficit, to start to put money aside during years of growth for a rainy day and to do that, principally, by making sure we continue with the efficiencies we have found in government spending, to make sure we bear down on the welfare budget and to continue to take the same amount of money which we have done through this parliament out of aggressive tax avoidance,” Cameron said.

“Really the election will come down to a choice between that plan, which continues with the competence and sensible economic management that has delivered the fastest growing economy in the western world with 1,000 jobs a day - the choice will be between that competence and the chaos that a Labour government with Ed Miliband and Ed Balls in the treasury would represent.”