Nick Clegg 'searched conscience' over spending cuts.

Nick Clegg has told Desert Island Discs that he had to search his conscience when making the cuts in benefits which have caused so much outrage here in Britain.

Speaking about the cuts, he said: "I have spent every day of this process, pretty well every minute of this process, asking myself whether there are pain-free alternatives, whether we are doing the right thing, and I genuinely believe there is no easy alternative.

"I have certainly searched long and hard into my own conscience about whether what we are doing is for the right reasons.

"I am not going to hide the fact that a lot of this is difficult. I find it morally difficult. It is difficult for the country."

Why is it that politicians think that we will feel for them if they tell us that their acts of cruelty were difficult for them to bring about? And why does he imagine that the rest of us would only have accepted "pain free alternatives?"

I should hope, at the very least, that Clegg was tortured before he threw 490,000 public service workers on to the dole, that is the very least he could have done.

And, likewise, one would hope that he felt anxiety before removing benefits from the disabled.

But, missing from all of this apologia is any explanation as to why alternatives were not explored. Why were the rest of us not asked to contribute more? Why was the top rate of income tax not raised? Indeed, why are so many people who earn a good living, like myself, not asked to contribute in any way other than a 2.5% increase in Vat? Why aren't the city bankers, the people who caused this economic crisis more than anyone else, being asked to contribute more than the £2.5 billion scheme which Osborne has conjured up?

Clegg and the Tories can expect little sympathy when they tell us how hard they found it to be so cruel to the sick, the old and the disabled.

The entire budget is a regressive disgrace. It was a genuinely hateful way to address the deficit and revealed the Tories as utterly unchanged from the days when they were known as "the nasty party".

The main difference at the moment is that the Tories have the Liberal Democrats acting as their heat shield, absorbing the public anger and attempting to give the Tories a fig leaf of respectability as they carry out this act of political thuggery.

So, if Clegg is expecting sympathy for how hard he found it to bring himself to agree to what he agreed to, he won't get an ounce of it from me.

As far as I am concerned he, and his party, are dead in the water. They will be slaughtered at the next election because of what Clegg has agreed to, and they will fully deserve it.

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Tags: Nick Clegg, George Osborne, Tories, Liberal Democrats, Con-Dem coalition

Clegg struggles to contain his party's 'guilt by association' with Coalition cuts.

Nick Clegg has lost his bloody marbles.

Nick Clegg, the Deputy Prime Mini-ster, yesterday tried to calm jitters among Liberal Democrat MPs about the impact of the cuts – not least on the party's own electoral fortunes. He said: "The spending review provides the best evidence yet of why we are in government – and that we are delivering on our priorities."

He appears to think that the "gains" which he has wrestled from the Tories...

Mr Clegg, who beat off a Treasury attempt to end 15 hours of free child care for all three- and four-year-olds, trumpeted Liberal Democrat "gains" in the spending review – including a £2.5bn-a-year "pupil premium" for children from disadvantaged families; protecting spending on health, overseas aid and infrastructure projects; radical welfare reform; and delaying a decision on whether to renew the Trident nuclear missile system.

... are, in some way, a price worth paying for half a million job losses.

Welcome as the pupil premium and spending on overseas aid is, does Clegg seriously think this will have any impact on the public psyche as Osborne wields his blade across a wide range of public services? Does he seriously think people will say, "Well, it could have been worse, we could be without the pupil premium?" Or, "Thank God they have delayed the decision on Trident!"

Clegg and the Liberal Democrats will be remembered as the co-authors of one of the most brutal assaults on the state in living memory.

And they will be viewed much more harshly than their Tory counterparts because they campaigned on the very opposite of what they are now backing.

In a high-risk strategy, Mr Clegg urged his MPs to share ownership of the cuts, describing them as a "Coalition process and Coalition product".

Admitting that the review involved difficult decisions, he insisted: "These are the right decisions to build a fairer and more liberal Britain."

I've yet to work out on what basis Clegg thinks cuts on this scale make Britain "fairer" or "more liberal". What does he mean by that?

It's simply not fair that the poorest members of our society should pay more of a price than the banking community for a crisis caused by their greed; nor is it, in any way that I can measure, more "liberal".

Indeed, it's hard to think of anything less fair and less liberal than asking the poor to pay for the mistakes of the country's wealthiest bankers.

As I say, Clegg has simply lost his marbles. He appears to think that him saying that something is "fair" and "liberal" makes it so. But the rest of the nation has eyes, we can see what is happening. And Clegg's rampant bullshit won't blind us to what he has signed up to.

He has sold his party - and the people who voted for him - down the river. He should be ashamed of what he has done.

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Tags: Nick Clegg, Con-Dem coalition, Tories, Osborne, spending cuts

Prominent Tory donors among business leaders who backed Osborne's cuts.

I said yesterday that I suspected the business leaders who had written to The Telegraph insisting that Osborne must stick to his guns regarding the Tory planned cuts would turn out to be Tory supporters.

Today's Independent:

The 35 businessmen warned against delaying cuts in a letter to the Conservative-supporting Daily Telegraph drawn up by Lord Wolfson, chief executive of Next. He has donated £293,250 to the Conservatives since 2006 and was made a Tory peer three weeks after the May election.

Another signatory, Sir Christopher Gent, non-executive chairman of GlaxoSmithKline, has given £113,400 to the Conservative Party since 2003, while Aidan Heavey, chief executive of Tullow Oil, has donated £5,500.

Seventeen of the 35 chairmen or chief executives who signed yesterday's letter were among the businessmen who endorsed a similar round-robin before the May election backing Tory plans to reverse Labour's proposal to raise national insurance contributions by 1 per cent. Mr Osborne later cancelled it for employers but retained it for employees.

It really says everything about the relationship between the Conservative Party and these business leaders that they will send round-robin letters at a moments notice backing Tory policies. And it's notable that, when they asked the Tories to reverse Labour's plans to raise national insurance contributions by 1%, that Osborne raised it for employees, but not employers.

One of these same business leaders who is demanding that welfare be slashed and social services axed - rather than see a rise in taxation - earns £6.5 million a year.

Now some economists have spoken out about the twaddle these supposedly impartial business leaders are spouting:

Christopher Pissarides, Britain's new Nobel laureate in economics and professor of economics at the LSE, said: "I am rather puzzled as to why big companies think the private sector will create jobs if the cuts are immediate rather than spread over two or three years, to give the private sector time to plan ahead. The situation is not so grave; there is no big risk premium of government debt as in Greece or Spain. I see a lot of confidence in the ability of the British Government to control the deficit. That confidence will remain if there is a well-arranged plan over the next few years rather than the next few months."

David Blanchflower, a former member of the Bank of England's Monetary Policy Committee, said of the letter: "It's a terrible, terrible mistake. The sensible thing to do is to spread [the cuts] over a long time. Clearly you have to deal with the deficit, but there is no economics that says you have to deal with it in a week or a month."

Stephen Alambritis, chief spokesman for the Federation of Small Businesses, said: "Large companies can take these cuts in their stride. The City will reward them with a higher share price if they reduce their workforce. But the Chancellor should not be emboldened by these business leaders.

"Some small firms rely on public-sector contracts for 50 or 60 per cent of their turnover. If the cuts are swingeing and overnight, these companies will be lost to the UK economy forever."

As I've said a thousand times, no-one is suggesting that we don't need to do something about the deficit, but there really is no need to pay off the mortgage in five years rather than twenty five.

People should remember that we finally paid off our WWII debt during the premiership of Tony Blair. And, that shortly after WWII, with debts far greater than the ones we currently face, we built a welfare state and much of our social housing.

All of this undermines Osborne's fallacy that he has no choice other than the one he is proposing. He's doing this because he wants to slash the cost of the state, not because it is the only possible solution to the situation we currently face.

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Tags: Osborne, Con-Dem coalition, cuts

Social housing budget 'to be cut in half'.

David Cameron is to slash the social housing budget in England by 50% and to change - for the first time ever - the right of tenants to a house for life.

Ministers are expected to introduce a "flexible tenancy" for people who move into council housing for the first time.

Tenants will be checked over a period of time to see if they still require help with housing from their local authority, the BBC has learned.

In August, Prime Minister David Cameron suggested tenants in England should get fixed-term contracts and be encouraged to move into the private housing sector if their finances improve.

He said greater flexibility was required within the social housing system, allowing tenants to move to find work.

But Lib Dem deputy leader Simon Hughes said his party was against the idea, which was not coalition policy.

Labour accused Mr Cameron of threatening the long-term stability people value from secure tenancy.

I would have thought that this might cause a huge rift between the Conservatives and the Liberal Democrats but I am so used to the Lib Dems lying on their backs and showing their bellies to the Tories that I suspect nothing will happen.

A party which enjoys huge support in university towns has already ripped up it's promise to abolish tuition fees and now plans to allow them to be doubled, despite the fact that most of them, including all five Lib Dems in the coalition cabinet, signed a pledge promising to oppose any rise in fees.

I feel sorry for the Lib Dems. They are basically decent people who Clegg has allowed to be turned into Cameron's cannon fodder.

They now appear to be backing Cameron's insistence that council tenants can be forced to rent in the private sector once their earnings reach a sufficient level. Forget how well you get on with your neighbours, forget any sense of community and belonging which someone might feel for the place where they live, Cameron will now insist that certain people move on simply because they can afford to.

And it won't surprise me that the Liberal Democrats, led by a man who is a conservative in all but name, will dutifully follow along behind. It's shameful to watch what Clegg is doing to that party.

And the public appear to be waking up to what is about to happen:

Most voters expect the poor and elderly to bear the brunt of David Cameron's savage cuts, an exclusive Sunday Mirror poll has shown.

Fifty-six per cent of those quizzed in our survey said the Government's welfare benefit cuts would hit the "poorest, elderly and most vulnerable" the hardest. Just 28 per cent disagreed.

Nearly half - 46 per cent - said Cameron understands the needs of the rich better than the concerns of ordinary people.

A similar number feared that the loss of hundreds of thousands of public sector jobs is too high a price to pay to slash Britain's deficit. Just 30 per cent of people asked agreed the job losses were a "price worth paying" against 47 per cent, who disagreed.

It seems that there is no policy too right wing for Clegg to insist to Cameron that he can't back it. What experience do any of these public school boys have when it comes to council housing?

None. None at all. And yet they are seeking to impose their values on a culture which they simply do not understand.

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Tags: council housing, Cameron, Clegg, Con-Dem coalition

Business backing for George Osborne's spending cuts.

Well, here's a surprise:

The leaders of 35 of the UK's biggest companies have expressed their support for the government's plans for spending cuts running into billions of pounds.

The bosses of Marks and Spencer, BT and GlaxoSmithKline are among those to have signed a letter to the Daily Telegraph.

They write that it would be a "mistake" for Chancellor George Osborne to water down his programme for reducing the budget deficit.

Mr Osborne will announce details of the Spending Review on Wednesday.

The bosses wrote in their letter to the Telegraph that there was no reason to believe Mr Osborne's approach would undermine any recovery.

They said: "Addressing the debt problem in a decisive way will improve business and consumer confidence.

"Reducing the deficit more slowly would mean additional borrowing every year, higher national debt, and therefore higher spending on interest payments."

"The private sector should be more than capable of generating additional jobs to replace those lost in the public sector," the signatories also claim.

So, a group of Conservative supporting business leaders think it's a great idea to slash welfare rather than increase taxation. Who could have seen that coming?

And they also think that the private sector is "more than capable" of replacing jobs lost through Osborne's cuts. Let's see how that works out.

And, as Robert Peston points out, one of their comments borders on the laughable.

The 35 also make one statement that will amuse many economists. They say "everyone knows that when you have a debt problem, delaying the necessary action will make it worse not better".

That may be true of individuals and even for most businesses. But there is a whole school of economists, largely those who call themselves Keynesian in some way, who would describe that statement as laughable.

They would argue that it was the application of prudent principles of personal finance to the level of the state that was to a large extent responsible for the severity of the Great Depression of the 1930s.

The unions are dead set against it, and the business leaders are writing to the papers announcing their support. It's like we are back in the eighties. There must be a Tory government in power.

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Tags: Tory cuts, Con-Dem coalition, recession, Osborne

Where will the axe fall? Whitehall waits for the bloodbath.

I have said ever since George Osborne spoke of cuts of between 25 and 40% that I thought he had pulled this figure from his ass and that such reductions were impossible to achieve.

Now, a member of his own team has stated, that achieving such cuts is "a metaphysical impossibility".

But we are about to find out where the axe is to fall.

Alan Johnson, the Labour Shadow Chancellor, is to attack Osborne's claim that the cuts are unavoidable.

As the outbreak of hysteria over the cutting of child benefit showed, most people in the UK support cuts, as long as the cuts do not directly involve themselves. We are all for other people getting along with less, but heaven forbid that it should directly affect us.

The Osborne tactic has achieved public support until now, because it has been all talk. We can all share Osborne's revulsion at immigrants receiving tens of thousands of pounds in benefits. If the deficit could be reduced merely by removing such obvious wrongs then Osborne would end up the most popular man in the country.

But, eventually, he is going to have to tell us what exactly he plans to do.

As the outrage over child benefit showed, at that point I fully expect Osborne's popularity to fall like a stone.

There is nothing unavoidable about what Osborne and the Con-Dem coalition are about to do. They have decided, as a matter of policy and ideology, to pay off the mortgage over five years rather than 25. It's going to hurt.

The people who support Osborne now, do so because they imagine that these cuts will affect other people. Once they realise that the cuts affect themselves, I expect them to lose their enthusiasm for them immediately.

Osborne has sold these cuts by highlighting benefit abuse, which most Brits abhor. But he's not going to be able to achieve the figures he is speaking of by merely cutting out such abuse.

And, as the outrage of high tax payers who lost their child benefit showed, at that point the whole thing is going to move from the abstract to the deeply personal.

The Con-Dem coalition have been getting away with murder up until now, talking tough - which people love - without actually telling anyone how it is going to affect themselves.

That honeymoon is about to come to a shuddering halt. And, once Osborne has spelt out where he intends to make his cuts, I don't think he or the coalition are going to be very popular at all.

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Tags: Osborne, Con-Dem coalition, spending cuts

Government urges councils to stop giving tax breaks to Scientology.

I never thought I'd find myself in agreement with Eric Pickles, but, on this occasion, I do.

The government is urging councils across the country to stop giving hundreds of thousands of pounds in tax breaks to the Church of Scientology.

The communities secretary, Eric Pickles, said a majority of the public did not want the "controversial organisation" to be given the kind of favourable treatment usually reserved for charities and questioned this use of public money.

The church, which is not classed as a religion by the Charity Commission, was described as a cult by a high court judge in 1984.

It is the first time a cabinet minister has intervened in the long-running row over the tax breaks for Scientology.

At least four authorities have given tax breaks to the group, which counts a host of celebrities among its high-profile members.

I watched John Sweeney's recent Panorama programme about his revisit to Scientology, after his infamous episode where he totally lost it in front of a Scientologist, and it was hard not to find the whole set up extremely creepy. Sweeney was repeatedly followed, and even had ex-Scientologists tell him that he was goaded into his infamous blow out by the Scientologist, Tommy Davis, as a way of undermining his investigative work.

It was simply not the kind of behaviour one would expect from any church.

And yet certain UK councils are granting Scientology tax breaks.

At least four authorities have given tax breaks to the group, which counts a host of celebrities among its high-profile members.

City of London Corporation has asked it to pay only one-fifth of the usual rates on its London headquarters, near St Paul's cathedral. As a result, it has saved £1.3m worth of tax.

The six-storey building was opened in a lavish ceremony attended by the leading Scientologist Tom Cruise in 2006.

The corporation decided Scientology could be classed as a charity either for the advancement of religion "or other purposes beneficial to the community".

The council says it feared the organisation would take it to court were the tax breaks to cease.

I think Pickles, especially at this time when high earners are losing their child benefits and we are all being told to expect cuts of around 25-40% in public services, will find that there is huge support for the Church of Scientology to lose any tax exemptions which they are currently enjoying.

Anyone who watched Sweeney's investigation would find it impossible to describe the behaviour we witnessed as the kind one would expect from any religious organisation.

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Tags: Scientology, Panorama, Eric Pickles, Con-Dem coalition

Coalition hints at bringing end to universal benefit.

The Tories loathe the idea of universal benefits, which is why Osborne risked outraging his party by abolishing the right to child benefit for the better off citizen in the UK.

Now, the Tories plan to attack the principle of universal benefits again, this time by challenging the right of all old age pensioners to claim a winter fuel allowance.

But as the axe hovers over funding ahead of the spending review on 20 October, The Independent on Sunday has learnt that the winter fuel allowances paid to all over-60s could be restricted to the least well-off or taxed to limit the sum received by wealthy pensioners. It follows the row at the Tory party conference last week over plans to axe child benefit for high earners from 2013.

The move would strike at the heart of the principle of universal benefits for the elderly and fly in the face of assurances given by Mr Cameron that the payments would be "safe" under a Tory government. Some senior Tories oppose such a dramatic U-turn because of the damage it would cause to the Prime Minister's credibility.

I actually agreed with the plan to limit child benefits to those who actually need them, but I do worry about means testing anything which affects old age pensioners. Many old age pensioners are incredibly proud, and would do without a benefit before suffering what they see as the indignity of being means tested. That's why, in principle, most of us support this as a universal benefit.

We all remember the awful stories of old age pensioners dying of hypothermia because they were too scared of their fuel bills to turn on the heating in the winter. This universal benefit was introduced to make those horror stories a thing of the past.

By means testing such a benefit, Cameron risks bringing those horror stories back as some old age pensioners will simply be too proud to apply for help.

With the Government apparently signalling an end to universal benefits, the Age UK poll also showed 73 per cent of the public opposes means testing. Only half of Tories surveyed at the party conference agreed that "everyone who has worked hard and paid taxes all their life deserves the same support from the Government in old age".

Michelle Mitchell, Age UK's charity director, said: "With the lives of thousands of older people at risk if essential care services are cut, the Chancellor will not quickly be forgiven if he fails to support the oldest and frailest, who rely on public services the most."

73% of us oppose means testing pensioners, for very good reason.

They are amongst the most fragile people in the country, and that is why most of us would rather give a well off pensioner money they don't need, than run the risk of watching someones granny die because she is too proud to ask for help.

Cameron is now going to reverse that. It's yet another thing that he failed to tell us when he asked people to vote for him. At this point I am left wondering why he bothered to release a manifesto at all.

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Tags: Cameron, pensioners fuel allowance, Tories, Conservatives, Liberal Democrats, Con-Dem coalition

Benefits feel the squeeze – but the City doesn't.

The Tories have always been in favour of a smaller state, and that is reflected in the cuts which they are making. However, the Tories are determined that the cuts they wish to impose must never be seen as ideological, which is why they are now insisting that the cuts are the result of financial necessity, and that Osborne has no choice other than to indulge in the kind of brutal austerity which he is doling out.

It strikes me as odd that fate has been kind enough to hand the Tories the type of task that they have always relished carrying out, and made it a matter of necessity to boot. So, according to their script, they get to do what they have always wanted to do, but - Heaven forfend - it's not their fault.

Oh, that life would be so kind to the rest of us.

Yesterday, Osborne scrapped child benefit for families where one member earns more than £43,875 and put a cap on the amount any family can claim in benefits at £26,000. I don't think anyone could argue against high income families losing a child benefit which they don't really need, especially at a time of recession, but there is a slapdash manner to the way Osborne has done this which is troubling.

It admits the shake-up will create anomalies: a two-earner couple both on £40,000 a year will keep their child benefit, while a family with a single earner on £45,000 will lose theirs. The benefit is worth £20.30 a week for the first child and £13.40 for each subsequent child. So one-child families who lose out will be £1,055 a year worse off and those with three children £2,500 worse off.

Of course, Osborne will, once again, claim that necessity has tied his hands. And it is certainly true that it is many of his own supporters who will pay the price of this cut. However, what Osborne is really attacking here is the principle at the heart of Britain's welfare system; that some benefits, especially benefits for children, are universal and not subjected to means testing.

Osborne will willingly take the wrath of his own party in order to tear down that Labour ideal.

I expect there to be some discontent amongst the Liberal Democrats in the coalition, but Clegg will, of course, support anything which is fiscally right of centre.

Critics said it undermines the principle of universal benefits locking the middle classes into the welfare state. It also contradicts pledges made by David Cameron, Mr Osborne, Nick Clegg and Vince Cable in the run-up to the May election.

Mr Clegg endorsed yesterday's change but there are signs of a backlash from the Liberal Democrats, whose conference two weeks ago voted to retain child benefit as a universal payment. Bob Russell, MP for Colchester, told The Independent: "If I have an opportunity to vote against it, I will. I support universal child benefit. It is a guarantee for the child because it is paid to the mother."

This is all happening at a time when the banks - the section of the populace who created this financial disaster - are, according to the Centre for Economics and Business Research, enjoying bonuses this year in excess of £7 billion.

Which sort of renders Osborne's words to the conference as empty rhetoric:

"We will not allow money to flow unimpeded out of those banks into huge bonuses, if that means money is not flowing out in credit to the small businesses who did nothing to cause this crash and suffered most in it."

But the money is flowing out. £7 billion of it.

Which brings me back to my original point. This isn't about financial necessity, although a necessity exists, this is purely ideological.

There are billions of pounds flowing into the arms of the people who caused this mess whilst Osborne attacks the middle class - his own supporters - in order to destroy a principle which Osborne vehemently disagrees with.

He's entitled to loathe the principle of universal benefits, and he's entitled to attempt to destroy that principle. I just can't bear the fact that he is being so dishonest about what he is doing. He is hiding behind the claim of necessity, when the riches flowing around the city show that there are other places he could raise money if that was his true priority.

He wants to attack and reduce the welfare state but lacks the courage of his convictions to make an argument for doing so. Instead, he hides behind the claim of necessity.

Thatcher would never have displayed such cowardice. She would have told us what she was doing and why she was doing it. And she would have loved the fact that we loathed her for it.

Osborne lacks her courage and honesty. He's dismantling the state, and hiding behind the flimsy excuse that he has no other choice. When it's clear to all that there are lots of other choices.

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Tags: Osborne, Conservative party conference, child benefits

Phone-hacking scandal: Andy Coulson 'listened to intercepted messages'.

The story that Andy Coulson, former editor of the News of The World and now Head of Communications for David Cameron's coalition, did not know of the blatant illegality being carried out in his own news room was always hard to believe.

Now, a journalist who worked under him has come out and stated that Coulson not only knew that his journalists were listening in to celebrities messages, but that he even listened to recordings of them himself.

Coulson has always denied knowing about any illegal activity by the journalists who worked for him, but an unidentified former executive from the paper told Channel Four Dispatches that Coulson not only knew his reporters were using intercepted voicemail but was also personally involved.

"Sometimes, they would say: 'We've got a recording' and Andy would say: 'OK, bring it into my office and play it to me' or 'Bring me, email me a transcript of it'," the journalist said.

The claim, due to be broadcast tomorrow night, goes beyond earlier statements by Coulson's former colleagues.

Sean Hoare, a showbusiness reporter, told the New York Times Coulson had "actively encouraged" him to intercept voicemail.

Paul McMullan, who handled investigations, told the Guardian illegal activity was so widespread in the newsroom that Coulson must have known about it. Coulson has denied all the claims.

Channel Four's anonymous witness, whose words are spoken by an actor in the programme, says: "Andy was a very good editor.

"He was very conscientious and he wouldn't let stories pass unless he was sure they were correct ... so, if the evidence that a reporter had was a recorded phone message, that would be what Andy would know about.

"So you'd have to say: 'Yes, there's a recorded message.' You go and either play it to him or show him a transcript of it, in order to satisfy him that you weren't going to get sued, that it wasn't made up."

Coulson resigned from the newspaper after his royal journalist, Clive Goodman, was jailed after listening to the personal voice-mail messages of three members of the royal staff. Coulson claimed as he stepped down that this was a case of one bad apple and that the practice was not widespread.

Many people have come forward since the New York Times started investigating this and have stated that Coulson's version of events was untrue.

Indeed, there are even reports that the News of The World issued threats to make sure that all investigations stopped at Goodman.

Adam Price, one of the MPs from the media select committee which last year investigated the phone-hacking scandal, described how he stopped voting to compel News International's chief executive, Rebekah Brooks, to be called as a witness.

"I was told by a senior Conservative member of the committee, who I knew was in direct contact with executives at News International, that if we went for her, they would go for us – effectively that they would delve into our personal lives in order to punish them."

This story really isn't going to go away. Cameron appears to think that he can make out that this is a case of Labour MP's attempting to put pressure on his Head of Communications for political reasons. And that might play out well within his own party.

But, to the rest of us, this whole thing is beginning to stink. Too many people have come forward, and they are all saying essentially the same thing. Coulson knew.

Click here for full article.

Tags: Coulson, News of the World, Conservatives, Cameron

Clegg has pushed his party closer to political slaughter.

Reading the tabloid reaction to Vince Cable's observation that markets are often rigged and that capitalism "kills competition where it can", one would be forgiven for thinking that he has said something outrageous.

The Liberal Democrat business secretary, declared the Sun, had launched a "vicious attack on the free market". This was an "all-out assault on capitalism", the Daily Mail warned. The Federation of Small Businesses demanded an instant apology. Was an anti-capitalist business secretary actually possible, one BBC presenter wondered.

Of course, like Clegg's speech the other day, Cable's speech had also been cleared by Cameron's office, but the adoration of the market is so widespread amongst the press that they appear to forget that it was Ted Heath who once spoke of "the unacceptable face of capitalism". Nowadays, despite the recent almost total collapse of the market, any criticism of how capitalism is conducted is considered heresy.

I liked what Cable had to say, as did the Liberal Democrat base, and I welcomed his insistence that this government would not stand idly by whilst bankers awarded themselves bonuses whilst the rest of the nation faced cuts of between 25 and 40% to most public services.

However, Seamus Milne reminds us this morning that Osborne has let it be known there will be no new bonus tax or increased bank levy. So Cable is merely throwing scraps to the left to keep us happy, and this coalitions inexorable drift to the right will continue with the full support of Nick Clegg.

Both David Cameron and Clegg know they need to be pacified, as the public will be when it sees bankers piling up billions in new bonuses just as the cuts start to bite deep – and Vince is the man for the job.

But this is strictly for the gallery.

The events of the past few days have driven home that the Liberal Democrats are now in the hands of a very different kind of leadership from those they've had in the past. As their overwhelming rejection of Michael Gove's academies and free schools showed, most of the party's activists remain firmly on the centre-left. But Clegg and his closest allies are somewhere else entirely – and will ignore them.

With his mini-me panegyric to Cameron, his declaration that the state should not "compensate the poor for their predicament", his attempt to redefine social justice as equality "between the generations", and his insistence that the "vocation of Liberalism is not to be a leftwing ghetto", Clegg's message could not be clearer. The Lib Dem leadership has turned its back on a whole spectrum of opinion, both inside and outside the party. For all Cable's efforts, the traditions of Lloyd George and Beveridge and the party's social democratic strand have been decisively marginalised.

Of course, the rightward turn long predates the general election aftermath, which Lib Dem leaders insist gave them no choice but to join a Tory coalition. Clegg and his market-orientated Orange Book friends had been steering the party in this direction for the previous couple of years. That paved the way for a meeting of coalition minds – as did the Lib Dem team that prepared the negotiating options for Clegg in the six months before the election.

The result is that, beyond the cause of civil liberties, the Liberal Democrat leader is now following Tony Blair and Cameron in attempting to define himself against his own party.

I think Milne makes a very serious point there. Clegg is insisting that his party hold together "for the sake of the coalition", but his every utterance puts him - with the exception of his statements on civil liberties - on the right of the political spectrum.

Clegg won't mind for a second Cable feeding this kind of red meat to the conference. Indeed, it suits his purposes perfectly for Cable to play to the gallery and give them the kind of left wing rhetoric which appeals to their sense of social fairness, and their collective outrage at the behaviour of the banking community.

And, all the while, Clegg continues to drag his party ever more towards the right, stating that There Is No Alternative.

Indeed, the kind of statements which Clegg has been making of late - "The Lib Dems never were and aren't a receptacle for leftwing dissatisfaction with Labour" - seems a tacit admission that the Liberal Democrat left wing voters have deserted his party, possibly for good.

But for the Liberal Democrats, the prospects look grim. It's hard to see why voters should reward them – as Clegg's right-hand man, Danny Alexander, argues – for sticking to what is a Conservative course. Clegg pleaded with his troops this week to imagine a sunlit future after five years of coalition government, and promised the Lib Dems' independence would be protected. But whether the party is actually in one piece by then, or Clegg still their leader, seems very far from certain.

Eventually the Lib Dems will realise where Clegg has taken them. At that point, Clegg will have to go, or the Lib Dems will fracture. Because he has taken them on a suicidal course.

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Tags: Vince Cable, Nick Clegg, Con-Dem coalition, capitalism

Nick Clegg: Stick with me and we'll change Britain for ever.

I know I should care more about Nick Clegg's conference speech, but I simply don't. There's simply too much smoke and mirrors every time this guy tries to explain what he's up to.

He promised to prevent the Conservatives repeating their "slash and burn" cuts of the 1980s, whilst supporting a government suggesting cuts of between 25 and 40% across the board. That strikes me as contradictory.

Urging his party to join him on the difficult journey ahead, he asked members to "hold our nerve" as the public deficit was cleared. In return, he presented himself to his internal critics as the Coalition's conscience, promising to protect the most vulnerable people and parts of the country from the Treasury axe – despite warnings from analysts like the Institute for Fiscal Studies that the cuts will be regressive.

His 37-minute address, which had been cleared by David Cameron, declared that cuts would not be made for ideological reasons, a deliberate rebuff to Tory right-wingers. "It is not an ideological attack on the size of the state," he said. "It's not smaller government I believe in. It's a different kind of government: a liberating government."

It's easy to say that one is going to protect the most vulnerable, but the truth is that the cuts will affect the poorest the most. That is simply an undeniable fact. Osborne is seeking to make massive savings in areas like housing benefit. Only those earning the least need housing benefit.

Of course, there were some things that he got exactly right:

"I still think the war in Iraq was illegal. The difference is that lawyers now get anxious when I mention it," he said. He was making the point that the Liberal Democrats had not lost "our soul" by getting into bed with the Tories. "We haven't changed our liberal values. Our status is different but our ambition is the same," he said.

But opposition to the Iraq war does not automatically make one progressive. And that's my dilemma when it comes to Clegg. I am with him when he discusses abolishing identity cards and the surveillance state, I share his concern that the tax system should be made fairer, and I have no doubt that Cameron's Tories actually share his wish to dismantle ID cards and some areas of surveillance, but I don't buy his notion that the Tories are serious about ensuring that "Tax avoiders and evaders must have nowhere to hide."

With Lord Ashcroft playing such a pivotal role in the Tory election campaign, I found that claim to be laughable.

A well known Tax evader funded much of the Tory campaign, so how can Clegg - with a straight face - stand there and imagine that we will believe that the Tories are against such a thing?

And the claim which he seemed most proud of - "Never again will anyone be able to frighten voters by claiming that coalition government doesn't work" - is one that I have never actually heard anyone make.

The central thrust of his argument, and I will concede that it was well structured and that it went down well with a nervous Liberal Democrat crowd, was TINA: There Is No Alternative.

It's the same argument which Thatcher relied on in the eighties and that Blair posited when he was dragging us into the Iraq war. And it's a lie. There are always alternatives. Clegg and the Tories are trying to wipe out the deficit with obscene speed, oblivious to the pain which is going to be caused. It would be possible to tackle the deficit over a longer period of time. That is simply undeniable. So the central theme of his argument is a falsehood. No more true than when Thatcher or Blair relied on it.

And, none of these arguments were ever heard during Clegg's campaigning, or in the Liberal Democrat manifesto, so it's hard to listen to him say all this now and believe that one is watching a conviction politician.

As I say, I find it all to be smoke and mirrors. He's either adjusting to the new reality he finds himself in, or he was lying to us from day one.

And the fact that his speech was cleared by Cameron's office before he gave it, says everything about the death hug in which Cameron now holds Clegg.

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Tags: Nick Clegg, Liberal Democrat conference