Nick Clegg faces his biggest test

Britain is bracing itself for a period of austerity with voters seeking stability over greed and excess, Vince Cable said today as he sought to paint the Liberal Democrats as the party of stability.

In a well received speech designed to attract middle and low income voters, the Liberal Democrat Treasury spokesman claimed the credit crunch had sparked a national mood change requiring the adoption of “sensible and fair” language.

The former acting leader said that tough times were ahead for Britain, and in the most resonant section of his speech, he urged Britons to accept that house prices have to fall to more realistic and affordable levels.

“We need to confront our national obsession with property. Houses are homes to live in; not gambling chips.”

He suggested that the majority of British politicians had yet to catch up with the new era, claiming Britain was reacting against self indulgent behaviour and “binging” by government and banks.

He said: “I think there is a mood of austerity; A reaction against greed, excess, waste, tax cheating and selfish, self-indulgent behaviour; an intolerance of binge lending by banks and binge spending by government; a craving for economic and personal security, sobriety and discipline; a demand that there is respect for fellow citizens and for the natural environment.”

In a bold bid to capture disaffected Tory voters, Mr Cable painted Conservatives economic policy as an attempt to “share the proceeds of recession” with millionaires and share dealers.

In his toughest attack to date on the Tories, he compared them to a “phoney religious cult”, calling Cameron Conservatives “plausible, oleaginous, well-bred salesmen who are marketing a new brand of snake oil.”

He added: “If there are any proceeds to share their top tax priority is to lift millionaires – indeed double millionaires – out of inheritance tax; his second is to remove the burden of stamp duty from share dealers.”

This is the latest phase of a Liberal Democrat strategy which is an attempt to capture low and middle income earners, particularly those in Tory seats, who they say would not benefit financially from a Conservative government.

He said: “I keep reading in the press that some of our activists don’t like the language of tax cutting; they think it is ‘right wing’. But I don’t see what is ‘right wing’ about wanting to cut the taxes of millions of people who earn less or barely more than the equivalent of the minimum wage.”

Polling by Populus for The Times shows that the Liberal Democrats are trusted by voters, seen as in touch and caring for the concerns of typical families.

Even though Mr Cable has been warning about the problems for the housing bubble and debt crisis before any other politician, this has not translated into support for the party on economic issues. Voters still rank the Liberal Democrats third for tax and spend policy, it seems.

Mr Cable denies that he was soft-peddling his attacks on Gordon Brown, pointing to a passage in the speech where he compared the Prime Minister to a “twitching corpse”.

The party today agreed to find a package of £20 billion public spending cuts, some of which could be made into tax cuts for the less well off.

The party membership overwhelmingly rejected calls from Evan Harris, the party’s science spokesman and Paul Holmes, who are both on the left of the party, to put the money into public services.

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