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Lib Dem conference: Clegg denies rift with Cable over economy Lib Dem conference: Clegg denies rift with Cable over economy
(about 1 hour later)
Nick Clegg has denied suggestions of a rift between him and his Cabinet colleague Vince Cable about the Lib Dems' future economic policy. Nick Clegg has denied suggestions of a rift with Vince Cable as the Lib Dem leadership saw off opposition to its economic strategy at its conference.
The party is debating a motion at their conference, with some activists calling for the party to differentiate itself more clearly from the Conservatives. Activists backed the leadership plan of cutting the deficit, rejecting calls for changes to the Bank of England, and housing controls to promote growth and to distance themselves from the Tories.
The business secretary was expected to miss the debate, seen as a challenge to Mr Clegg, but he is attending. The business secretary was expected to miss the debate but backed the plans.
Sources close to Mr Cable said talk of a row had been "massively overblown".Sources close to Mr Cable said talk of a row had been "massively overblown".
Although it will not be binding on the government, Monday's debate will be a clear indication of what activists are thinking and will help shape the direction of the party's economic policy in the run-up to the next election - scheduled for 2015. Although it was not binding on the government, Monday's debate was a clear indication of the mood of the party and will help shape the direction of economic policy in the run-up to the next election - scheduled for 2015.
'No complacency''No complacency'
Mr Cable has been more cautious about the state of the economy than most other ministers - including his party leader - warning that talk of a lasting recovery was premature and that it risks being derailed by another housing bubble and other factors. Mr Cable has been more cautious about the state of the economy than most other ministers - including his party leader - warning that talk of a lasting recovery was premature and that it risked being derailed by another housing bubble and other factors.
His warnings have led Prime Minister David Cameron to call him a "Jeremiah" while former Lib Dem leader Sir Menzies Campbell has urged Mr Cable to be "less gloomy".His warnings have led Prime Minister David Cameron to call him a "Jeremiah" while former Lib Dem leader Sir Menzies Campbell has urged Mr Cable to be "less gloomy".
It was reported on Sunday that Mr Cable would not vote for the leadership motion on the economy which defends the party's achievements in government, including its deficit reduction strategy, but urges more investment in housing and other areas. It was thought that Mr Cable would not vote for the leadership motion on the economy, which defends the party's achievements in government, including its austerity measures in the past three years, but urges more investment in housing and other areas.
But Mr Cable arrived in the conference hall one hour into the debate and ahead of Mr Clegg's own contribution - although he did not sit alongside his party leader and other ministers. But Mr Cable arrived in the conference hall one hour into the debate and voted for the leadership's position - although he did not sit alongside his party leader and other ministers.
The BBC understands that Mr Cable - who will give a speech of his own later - will vote for the leadership's position after all. Addressing activists, Mr Clegg said the Lib Dems' role in the coalition government did "not tie its hands" when it came to the next election and it would advocate distinct policies on taxation, spending, housing and employment.
Speaking to the BBC, Mr Clegg said he agreed there was "no room for complacency" and the government must be "vigilant that we do not preside over another asset bubble". But he told activists: "Be careful what you wish for. If you start messing around with the big goalposts that we have stuck in the ground and which frame the stability required for economic growth, we will destroy jobs and decrease prosperity."
But he said the fact the economy was growing again was due, in part to the fact that the Lib Dem had "held their nerve" in the face of calls to change direction and this was a "feather in their cap". Speaking earlier to the BBC, Mr Clegg said he agreed there was "no room for complacency" and the government must be "vigilant that we do not preside over another asset bubble".
Mr Clegg said Monday's leadership-backed motion recognised the government's achievements but set out things the Lib Dems would do differently from their Conservative partners - such as allowing councils to borrow against their balance sheets to fund new homes. But he said the fact the economy was growing again was due in part to the Lib Dems "holding their nerve" in the face of calls to change direction and this was a "feather in their cap".
'Doing well''Doing well'
Asked about Mr Cable's participation, Mr Clegg said he could not control what his colleagues did.Asked about Mr Cable's participation, Mr Clegg said he could not control what his colleagues did.
"I think this is a slight storm in a tea cup," he told Radio 4's Today. "I think this is a slight storm in a teacup," he told Radio 4's Today. "I am the leader of the Liberal Democrats. I do not run a boot camp... he has made it quite clear that, of course, he supports the motion because, not least, he is in effect one of the co-authors of it."
"I am the leader of the Liberal Democrats. I do not run a boot camp... he has made it quite clear that, of course, he supports the motion because, not least, he is in effect one of the co-authors of it." In Monday's debate, the leadership was backed by a succession of ministers and prominent MPs, including party president Tim Farron - who said there was "nothing progressive about bottling out of hard decisions to stabilise our finances".
He added: "The key thing is - does the motion strike the right balance between the credibility we have assumed as a party because of they way we have held our nerve over the last three years... but at the same time sets out new ideas on further reforms of banking, further investment in green technologies and further investment in housing."
The Lib Dem leader said it was "wrong" to suggest economic growth was limited to the south of the country and certain sectors since the picture for manufacturing was improving and many export firms in his Sheffield constituency had been doing "exceptionally well".
The leadership's position was backed by a succession of ministers and prominent MPs, including party president Tim Farron - who said there was "nothing progressive about bottling out of hard decisions to stabilise our finances".
Watering down the government's economic strategy was "politically unwise" and the party should not "disown" it, he said, urging the Lib Dems to "stick to their guns".Watering down the government's economic strategy was "politically unwise" and the party should not "disown" it, he said, urging the Lib Dems to "stick to their guns".
'Distinctive''Distinctive'
But an amendment put forward by the Social Liberal Forum calls for the party to put forward a "distinctive, independent" economic policy in the run-up to the 2015 election, including changing the remit of the Bank of England to focus on jobs and living standards. But former MP Paul Holmes warned the party against "writing a coalition manifesto" and said it must put forward its own policies.
Dr Prateek Buch, one of the amendment's authors, said "coalition compromises" could not be the starting point for the party's 2015 policy and suggested the government's deficit reduction strategy needed to be more flexible. An amendment put forward by the Social Liberal Forum calling for the party to change the remit of the Bank of England to focus on jobs and living standards, rather than just inflation, and for ministers to set a target for 300,000 new homes a year was defeated.
"The pace of cuts and tax rises need to take account of what is happening in the real economy," he told the BBC News Channel.
Backing the amendment, party member Naomi Smith accused Chancellor George Osborne of inflating the housing market with a "mortgages for votes" scheme and warned the Lib Dems against "an ideological merger" with the Tories' economic policy.Backing the amendment, party member Naomi Smith accused Chancellor George Osborne of inflating the housing market with a "mortgages for votes" scheme and warned the Lib Dems against "an ideological merger" with the Tories' economic policy.
And Gareth Epps said the party risked going into the next election with a "complete vacuum" in economic policy.And Gareth Epps said the party risked going into the next election with a "complete vacuum" in economic policy.
Ahead of a separate debate on tax later, the Lib Dem leader also restated that party policy was not to raise the top rate of tax back to 50p. Dr Prateek Buch, one of the amendment's authors, said "coalition compromises" could not be the starting point for the party's 2015 policy and suggested the government's deficit reduction strategy needed to be more flexible.
"The pace of cuts and tax rises need to take account of what is happening in the real economy," he told the BBC News Channel.
Ahead of a separate debate on tax, the Lib Dem leader also restated that party policy was not to raise the top rate of tax back to 50p.
The current 45p rate was higher than during Labour's 13 years in power, he said, and the party's emphasis was on trying to shift the burden of tax away from taxes on work and enterprise to those on assets, such as property.The current 45p rate was higher than during Labour's 13 years in power, he said, and the party's emphasis was on trying to shift the burden of tax away from taxes on work and enterprise to those on assets, such as property.