Clegg Wins Economy Vote After Cable Falls In

Nick Clegg has been given his party's backing over the coalition's economic strategy, avoiding any challenge to his authority.

The Lib Dem leader took the unusual step of asking conference delegates to vote in favour of a motion endorsing the Government's approach and fiscal mandate.

Rebel amendments put forward would have committed the party to watering down the deficit-reduction plan and changing the Bank of England's mandate.

But they were overwhelmingly defeated after Mr Clegg himself warned the result would only be welcomed by George Osborne and his Labour shadow Ed Balls.

Business Secretary Vince Cable also made an 11th hour change of heart and turned up to cast his vote in support of Mr Clegg, after aides said he would stay away.

Vince Cable arriving in the conference hall on Monday

The motion, Strengthening the UK Economy, asked activists to "reaffirm support" for the coalition's fiscal mandate, which says the Government's books should balance by 2017-18.

Pensions minister Steve Webb proposed it and Mr Clegg summed up, becoming the first Lib Dem leader to choose to speak in such a debate for more than six years.

Warning delegates to "be careful what you wish for", he said: "If we start messing about with the big goal posts we have stuck in the ground which frame the stability which is required for further economic growth, we will destroy jobs and decrease prosperity."

He added that "chopping and changing" the Bank's mandate for setting interest rates would "increase the uncertainty that all speakers have said is very destructive of further economic confidence and recovery".

He also criticised proposals to remove councils' borrowing limits to allow them to invest more in housing, describing this as a "complete revolution" that would not lead to a "single extra affordable home".

Mr Clegg was earlier forced to deny rumours of a damaging split with Mr Cable over the economy, insisting at the conference in Glasgow that it was all a "total storm in a teacup".

The Business Secretary's aides had initially refused to confirm whether he would vote in favour of the motion, indicating that he believed it could be "improved".

But after an apparent climbdown, it emerged he would back it and appeared in the conference hall as sources said the issue had been "completely blown out of proportion".

Mr Clegg told Sky: "There isn't some great gunfight at the OK Corral going on here in Glasgow. We are having a sensible debate about the economy.

"Vince and I work very closely together. I don't run a boot camp or determine exactly who is in which room at what time.

"What Vince and I have done is to work on the ideas that are in that motion - which he has made quite clear he supports - together."

Apparent tensions with Mr Cable came after Mr Clegg and Chief Secretary to the Treasury Danny Alexander both rejected his call for a limit on the Government's Help-to-Buy scheme.

The Business Secretary raised eyebrows last week by telling Sky News the extension to the policy, due in January, should be reconsidered amid fears of a housing bubble.

But Mr Clegg and Mr Alexander warned on Sunday that national policy should not be set based on what was happening in London, where prices have recently risen sharply.

Mr Alexander told Sky News' Murnaghan programme: "We are a million miles away from a housing bubble in this country. I don't think we should allow the tail of central London to wag the dog of this policy."

As the conference focuses on the economy, two new opinion polls showed the scale of the party's slump in support since it entered the coalition with the Tories in 2010.

A YouGov survey for the Independent found that 36% of those who say they would vote for the party believe it has changed for the worse since the last election and just 20% believe it is better.

In a separate survey by OnePoll for ITV's Daybreak, 72% of people identifying themselves as Lib Dem voters said Mr Clegg was not a good leader and 57% said he should stand down before the 2015 election.

Mr Clegg said: "I think we were right to step up to the plate and roll up our sleeves, however much it's clearly hit our short-term popularity, because without us the economy would not now be recovering."

He also said he believed TV debates between major party leaders were an "important addition" to the election race and should be repeated during the next campaign.

"I'm ready to have TV debates whenever they are organised," he told Sky News. "I think they were a good innovation last time."

In a question and answer session later, Mr Clegg said protection for the NHS and schools budgets should be kept after the next election.

He also admitted being in coalition was a constant battle as he sought to ensure his party stood up for itself as delegates criticised welfare reforms.

"I'm not going to pretend to you that I don't find some of the individual decisions, particularly on welfare reform, really difficult. You would have to be made of granite not to wrestle with some of these things," he said.

But there was embarrassment for the party as a crib-sheet of lines for Lib Dem MPs to take in media interviews was inadvertently emailed to journalists.

They were reminded that they should say the party met for conference "in a confident mood" and had "a strong record of achievement in Government".

They were also told to say that Labour "cannot be trusted to build a stronger economy", while the Tories "on their own can't build a fairer society".

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