Donald Macintyre's Sketch: Far away, up in the clouds, in a land where everyone's happy... the Lib Dems launch their economic policy

Nick Clegg and Danny Alexander are going up in the world. Fifty-two floors up, in fact. Presumably to underline Clegg’s theme that for the Lib Dems, as opposed to the Tories, “austerity is a means to an end and not an end in itself – and the end is in sight”. They chose the notably unaustere Gong Bar at the Shard’s Shangri-La Hotel to launch their economic policy.

Besides the fabulous views – which would have been a bit more fabulous if much of London was not shrouded in grey mist – it’s hard to better the hotel’s own description of the venue’s decor: “Inspired by the mythical aspect of cinnabar – a mineral used historically to create the ‘dragon red’ in the walls of Chinese Imperial Palaces... the interior is also reminiscent of the traditional boudoirs of the West.”

Disappointingly, the Deputy PM and Treasury Chief Secretary didn’t tempt fate by cracking open the many champagnes behind the bar, ranging from Krug to Billecart-Salmon.

But they might as well have done, since Clegg was adamant that a recent poll showing that he – like Alexander – would lose his seat was “complete and utter nonsense”. (Not to mention commissioned by Unite.)

And that the public would be a lot keener on their fiscal programme than the “kooky, made up figures” in the Tories’ “Tea Party” manifesto, or Labour’s deficit-clearing plans on the “never-never.”

The fictional Shangri-La in James Hilton’s The Lost Horizon, was a Himalayan Utopia, isolated from the real world – where everyone was permanently happy. It would be unkind to compare Alexander and Clegg to residents of that mythical earthly paradise. But there was something unreal about their reluctance to acknowledge that the ratio between spending cuts and tax increases would be 60/40 rather than the 80/20 they had originally planned.

They insisted that a ratio of between 75/25 and 80/20 would be maintained for the two parliaments between 2010 and 2020. Then it was put to them that manifestos usually apply to the next parliament rather than the one just past,

Alexander explained that this was all for another day. But then the shift of the burden towards higher taxation on the rich was thanks to Vince Cable, not to be seen or even mentioned, up here in the clouds. Cable grounded! But that may be a price worth paying for getting his way.