Clegg calls on Lib Dems to stick with coalition as worries grow

He used his keynote speech in Liverpool to urge fellow Liberal Democrats to "stick with us" despite growing concern within the party over their leadership's support for unpopular Conservative Party policies and fears about long-term damage to their electoral hopes.

The Lib Dem leader reminded any doubters present of his party's achievements after nearly five months of coalition Government, and promised there would be plenty more successes to come over the next four-and-a-half years.

And he savaged both Labour and the banks for creating a crisis which meant spending cuts would be inevitable, before pledging that vulnerable regions such as the north of England would not be hit hard as in previous recessions.

SPENDING CUTS

Mr Clegg said the scale of Britain's budget deficit meant spending cuts were "the only choice if we want to bring back hope and optimism to our nation."

But he said the extent of the cuts should not be exaggerated, and promised to protect the North, Scotland and Wales.

"The spending review is about balance and responsibility, not slash and burn. In making these changes we will learn from the mistakes of previous recessions. We will not repeat the mistakes of the 1980s, in which whole communities were hollowed out.

"I know from my constituents in Sheffield how worried people are that cuts will hurt the North in the way the industrial changes of the 1980s did. So let me say to everybody in those communities, in Scotland and in Wales, many of whose lives were torn apart: 'Yes, it will be difficult, but it will not be like the 80s.

"We will not let that happen. We will make these cuts as fairly as possible.'"

HIS ACHIEVEMENTS

The Sheffield Hallam MP spoke proudly of his party's successes since coming to office, telling delegates that "for the first time in my lifetime", the Liberal Democrats have had the opportunity to deliver on their election promises.

"Just think what we've done already," he said. "We've ended the injustice of the richest paying less tax on investments than the poorest do on their wages. We've guaranteed older people a decent increase in their pension.

"In November, we will publish a Freedom Bill to roll back a generation of illiberal and intrusive legislation. By Christmas, identity card laws will be consigned to the history books.

"From New Year's Day, the banks will pay a new levy that will help fill the black hole they helped create.

"On April 1, 900,000 low earners will stop paying income tax altogether. In May, the people of Britain will get to choose their own voting system. And this time next year, there will be a pupil premium so the children who need the most help, get the most help.

"We've always been the face of change. We are now the agents of change."

THE COALITION

The Deputy Prime Minister spoke in glowing terms about the way his Conservative allies had applied themselves to coalition Government, and insisted that the Liberal Democrats would change British politics for good.

"The truth is I never expected the Conservatives to embrace negotiation and compromise," he said.

"But they did, and it does them credit. David Cameron showed he could think beyond his party and help build a new kind of politics.

"We have become more than the sum of our parts... Never again will anyone be able to frighten the voters by claiming that coalition Government doesn't work.

"Liberal, plural politics will feel natural - the sane response to a complex and fast-changing world. Just imagine how different our country will be."

THE LABOUR PARTY

Mr Clegg laid the majority of blame for Britain's current financial crisis unequivocally at the door of the Labour Party.

Scathing of Labour's record in power, he told delegates: "The Labour leadership candidates are trying to rewrite history - but we remember.

"Civil liberties destroyed on an industrial scale; a widening gap between rich and poor; failure to act on the environment; locking up more children than anywhere else in western Europe; kow-towing to the banks; a foreign policy forged in George Bush's White House; the invasion of Iraq.

"And then, on top of all that they brought the country to the brink of bankruptcy. Writing cheques, even in the final days of their government, that they knew would bounce. This country could not have borne five more years of Labour."

THE BANKERS

Britain's reckless banks were the other main target of Clegg's wrath as he made it clear they would be forced to pay for their part in the financial crisis.

"Why should you have to accept a pay freeze, or changes to your pension, when the richest still get away with paying little or no tax at all?" he asked, listing a series of coalition policies designed to gain financial concessions from the banks and prevent a repeat of the recent crisis.

"We have done more in five months than Labour ever did to sort out the greed and the recklessness of the banks. Our approach is simple - they helped bring down our economy. It must never happen again."