Nick Clegg outlines deal terms with Labour, Tories

LIB Dem leader Nick Clegg has insisted that the new parliament would have to begin with an emergency budget in the first 50 days as the price of a deal with his party.

Liberal Democrat leader Nick Clegg speaks during a press conference at the National Liberal Club, central London. Picture: PA

In a confident move after seeing his party gain three per cent in polls yesterday, the Deputy Prime Minister also appeared to strongly hint that he is preparing to do another coalition deal with the Tories when he laid out his key demands on welfare.

Mr Clegg insisted the Conservatives would have to drop their commitment to £12 billion in welfare cuts as a “red line issue” for any renewal of the coalition government.

But he also said that he would demand that Labour sets out a much clearer timetable for slashing the deficit.

The Lib Dem leader’s statement of intent came as his party hit nine per cent in a poll yesterday with senior figures claiming they are still performing well in seats they hold.

Insiders have claimed that the Lib Dems could hold on to 35 or more seats despite a collapse in their overall vote from 2010 which would allow them hold the balance of power.

Mr Clegg’s message to the Tories came as a Lord Ashcroft poll put them on 36 per cent to Labour’s 30 per cent, a lead of six points which would leave them close to an overall majority but probably in need of support from another party.

At a press conference, Mr Clegg said: “Whether we are in government with Labour or the Conservatives, we will pin them down within weeks of the election and force them to put their cards on the table.

“David Cameron, Ed Miliband - the Liberal Democrats won’t let you bluff your way through. We won’t let you risk our economic recovery.

“We will have a stability budget, to take place within 50 days of election day, a pre-condition of any coalition arrangement.

“There will be no deal if there is no stability. No coalition without coming clean with the British people. This too, is a red line.

“But it is also a means to an end. It is a guarantee to the British public that the government will balance the books, following a clear timetable, and do so fairly.

“Let me tell you what will lie at the heart of it - a commitment to balance the books, in a timely fashion and in a fair way, and a clear commitment to our world-class public services, including the money that our nurseries, schools and colleges need.”

The stability budget will set out detailed tax and welfare plans to balance the cyclically adjusted current budget. Remaining savings from departmental expenditure will be detailed in a Comprehensive Spending Review to be held in autumn 2015.

The Lib Dem leader said there were three “big principles” behind his stability budget: a timetable to “wipe the slate clean” by dealing with the deficit, a rejection of balancing the books “on the backs of the working-age poor”, and ensuring that “those with the broadest shoulder” make an extra contribution through tax.

Mr Clegg said all three main parties had voted in Parliament to deal with the deficit by the end of 2017-18 and “in the absence of any better idea, that is clearly the timetable which we should stick to”.

“The Labour Party now appears to be saying we have got no real plans to do so any time during the course of the next parliament at all,” he added.

“That’s not really good enough, the Labour approach - no timetable, no plan, no detail. You can’t balance the books, let alone do so fairly, unless you have some detail, unless you have a plan, unless you have a timetable.”

Confirming that his party would not sign up to Tory plans to slash £12 billion off the welfare budget, he said: “There is no way we would accept the Conservative plan to take the equivalent of £1,500 away from eight million of the most vulnerable families in this country.”

The Lib Dems have championed a mansion tax, the “banded high-value property levy”, on homes worth more than £2 million - a principle shared by Labour but resisted by the Conservatives.

Mr Clegg appeared to concede that the policy would not be a deal breaker as long as the rich were asked to make some other contribution.

“It’s the principle that counts,” he said, saying that the Lib Dems had identified £5 billion of tax increases as part of the £27 billion consolidation effort needed by 2017/18.

“We have identified £5 billion of tax increases on the wealthiest, partly through the banded high-value property levy, partly through changes in capital gains tax, dividend tax and other measures, to find that £5 billion.

“In the absence of a better plan from anyone else, that’s the plan that we would expect to put in place.”

He added that “if people have other ideas” he had an “open mind” about how to meet the Lib Dems’ aims.

“But the idea that the Liberal Democrats would ever sign up to a deficit reduction plan which penalises the working age poor and doesn’t ask anything of the wealthiest through the tax system, that is inconceivable.”

Mr Clegg’s speech at the National Liberal Club in central London followed the decision to start explicitly setting out the terms the Lib Dems would demand in any deal after 7 May.

He has already declared that a commitment to increase the education budget to keep pace with rising prices and the growth in pupil numbers will be a “no ifs, no buts” red line.