Vince Cable warns Nick Clegg that Lib Dems must return to 'radical' party roots

Business Secretary voices concerns over party's future and economic policy at conference

Vince Cable has warned that the Liberal Democrats must not sacrifice their principles as Nick Clegg tries to convert them into a party of power.

The Business Secretary told a fringe meeting at the start of the Liberal Democrat spring conference in Brighton: “While we are now not a protest party we have to ensure that we remain not just a party of government but a radical party, attacking privilege, vested interests and the abuse of economic and political power.”

Appealing to Liberal Democrat activists disaffected by the compromises of coalition, he added: “We must make a success of government but in acquiring respectability and the aura of responsibility we must continue to defend our strong liberal and social democratic values.”

In a warning shot across Mr Clegg's bows, Mr Cable called for new wealth taxes on the rich, including the end of privileges for “non-doms” and curbing people avoiding inheritance by making gifts. Renewing his call for a boost to housing and infrastructure projects, he said: “The Government, together with the Bank of England, must support recovery, not undermine it.”

The Business Secretary has been denied a speaking slot in the formal conference, where his grassroots allies in the Social Liberal Forum (SLF) pressure group have tabled a “Plan C” or “Plan Cable” for the economy. They hope conference delegates will agree today to discuss their emergency motion tomorrow. But the Liberal Democrat leadership will try to water it down because it opposes further spending cuts.

Mr Cable insists his “Plan A Plus” does not depart from Coalition policy. Addressing the SLF last night, he said he and Mr Clegg agreed it was a “mistake” for the Coalition to implement the capital spending cuts it inherited from Labour in 2010.

He attacked the economic policies of both Labour and the Tory right, and warned that Tory plans to cut net migration below 100,000 a year is “seriously damaging to economic recovery and politically pointless”.

He said businessmen and highly qualified staff were being driven away by Britain's complex visa procedures.

Mr Clegg pledged last night to stamp out sexism in the Liberal Democrats as he promised to learn lessons from the way they handled allegations that activists were sexually harassed by its former chief executive, who denies the claims. Lord Rennard will stay away from the conference.

Speaking at a rally in Brighton, Mr Clegg said: “Sexism must have no place in the Liberal Democrats. Harassment must have no place in the Liberal Democrats. Abuse of power and position must have no place in the Liberal Democrats. I won't tolerate it. Our party should be better than that.”

Speaking at the same rally as Mr Clegg, Equalities Minister Jo Swinson gave details for the first time of how she handled claims that Lord Rennard had behaved inappropriately.

She said a “number of women” had come to her and their “shared objective” was to make sure the alleged behaviour stopped. “I have not heard any account of inappropriate behaviour subsequently,” she said.

The Rennard affair and conviction of Vicky Pryce, the ex-wife of former minister Chris Huhne, have created a difficult backdrop to the conference.

But an upbeat Mr Clegg told the rally the party's victory in the Eastleigh by-election showed it is “winning again”. He said: “We won not in spite of being in power, we won because we are in power – locally and nationally.”

Helena Morrissey, a mother of nine who is chief executive of Newton Investment Management, will head an independent inquiry into the party's “culture, process and complaints”.

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