Clegg to attack Osborne over drift away from green agenda

Lib Dem leader will dismiss Tory claims that environmental policies harm economic growth

Nick Clegg will today tell George Osborne he must "wake up" to the green agenda, warning the Chancellor of the Exchequer that the slow rate of economic growth cannot be used as an excuse to abandon the coalition's environmental credentials.

The Deputy Prime Minister will use his speech to the Liberal Democrat spring conference to attack Tories, including Mr Osborne, who claim "we have to choose between boosting growth and being green".

The Liberal Democrat leader will pit himself against Mr Osborne on several fronts. He will insist the policy to go faster on increasing the tax threshold to £10,000 is a Lib Dem one, and demand the Budget "offer concrete help" to cut the taxes of ordinary working families. He will also insist the wealthy pay more, including targeting millionaire tycoons who pay less than 20 per cent tax. "Few things make me angrier," Mr Clegg will say, "than the sight of the wealthiest scheming to keep their tax bill down to the bare minimum."

In a defiant address, Mr Clegg will defend work-experience schemes for the unemployed – condemned by critics as slave labour, promise "sanity and responsibility" in the banking sector, and call for investment in green industries to boost jobs.

"Going for growth means going green," Mr Clegg will say in a direct challenge to the Treasury. "The new economic powerhouses – China, India, Brazil – are competing, so the choice for the UK is simple: wake up or end up playing catch up." Seeking to distance the Lib Dems from their coalition partners, Mr Clegg will insist: "Our party is the green party of government." He will announce that he is to lead the UK delegation to the Earth Summit in Rio de Janeiro in June.

Senior Lib Dems have been dismayed by Mr Osborne's attacks on the green agenda and the suggestion that it could curtail growth. In his autumn statement, the Chancellor said he was "worried" about the combined impact of green policies on energy-intensive industries. "If we burden them with endless social and environmental goals – however worthy in their own right – then, not only will we not achieve those goals, but the businesses will fail, jobs will be lost, and our country will be poorer." But Mr Clegg will today deliver a withering riposte, saying his response to Mr Osborne's anti-green rhetoric cannot be broadcast "before the watershed".

The imminent departure from No 10 of Steve Hilton, David Cameron's policy guru who championed Tory green policies in opposition, has added to the sense of unease about the coalition's commitment to the environment. Mr Cameron boasted that he would lead the "greenest government ever", but there are concerns that the slower than expected rate of economic growth over the past 23 months has seen a shift in the rhetoric.

A senior Lib Dem said: "There can be no rowing back from this government's commitment to being the greenest government ever. The Lib Dems will help keep the Tories honest on their green promises in opposition that they now appear to be wobbling on."

Vince Cable, the Business Secretary, told the conference yesterday that green industries, backed by the new Green Investment Bank, would be vital to securing growth. "Financial markets have failed, and we need thoughtful, intelligent government to take a lead," he said.

However, in a motion passed last night, delegates "expressed regret that a firm commitment to green policies is still not consistently embedded throughout government".

Today, members will turn their attention to an emergency motion on the party's efforts to rewrite the coalition's controversial NHS reforms, which will hand billions in health spending to new groups led by GPs. Mr Clegg saw off an attempt to pass a motion demanding the Health and Social Care Bill be dropped.

Ways to deal with the super-rich

Nick Clegg's proposals for a "tycoon tax" provoked a backlash from senior Lib Dems yesterday as the party's delicate Budget negotiating strategy was thrown into disarray.

The Lib Dem leader used an interview to call for a minimum rate of tax on total annual earnings in response to the many loopholes used by the wealthy to sidestep the Inland Revenue.

Mr Clegg proposed the measure as an apparent alternative to the "mansion tax" favoured by the Business Secretary, Vince Cable, in a suggested trade-off with George Osborne for dropping the 50p top rate of tax.

The former Lib Dem Treasury spokesman Lord Oakeshott said: "This is an idea which isn't even working in America. It would leave non-doms and non-residents scot-free because they put their income offshore. The only way to catch the super-rich is to tax the mansions they can't move to Monaco."

It wasn't clear if Mr Cable had been consulted on the proposal, but he didn't mention a "tycoon tax" in his speech yesterday.

Jane Merrick