If Nick Clegg’s story won’t stand up, the Lord Rennard scandal could finish him

Even victory at the Eastleigh by-election will not put an end to the Liberal Democrat leader’s troubles

Nick Clegg: when “non-specific concerns” over Lord Rennard’s conduct reached him, he failed to ask what those might be 

Tomorrow the voters of Eastleigh will choose their new MP in a by-election billed as the most important for 30 years. It is nothing of the kind. Eastleigh has instead become a sideshow featuring politics at its most dysfunctional. Voters who want to talk about schools and planning and the quaint notion of trust have been cast as extras in a sub-James Bond psychodrama.

What with the jail term that may await Chris Huhne, the departed MP, and the scandal involving Lord Rennard, the former Liberal Democrat chief executive, the people of Eastleigh can garner racier plot lines at the hustings than at their local cinema, where A Good Day To Die Hard is showing. Even if the Lib Dem candidate survives the current shoot-out, his party leader may catch the bullet.

Eastleigh, billed as a test of the Coalition partners, could yet supply a personal requiem for Nick Clegg, whose future now hangs in the balance. Lib Dem MPs increasingly worried by his handling of the sexual harassment allegations concerning Lord Rennard believe that Mr Clegg’s response to the crisis has been so inept as to put his leadership in doubt.

Others think Mr Clegg unlucky. As one leading party figure says: “If you search the closets of the other parties, you’re going to find worse scandals than this.” That may well be true. If the charges against Lord Rennard turn out, despite his denials, to be substantiated, then he will not be the first portly groper to mistake power for allure.

Had he not stepped down as chief executive quietly some time ago on health grounds, then Eastleigh would have been a cinch for someone who, in the words of one party stalwart, “won by-elections from nowhere”. Plenty of male Lib Dems still attest to the congenial charm of a man with “a Midas touch”, whereas the Lib Dem women now claiming molestation recall his alleged “octopus” hands.

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The Lib Dems’ sanctimony over women is perfectly illustrated by the party’s “gender balance weekends”, whose very name is likely to propel the most ardent feminist towards a Mary Berry soufflé masterclass. Rumours that Lord Rennard planned to help out with gender balancing apparently prompted whistle-blowers to break their long silence and so convulse a party that, in the words of a senior male Lib Dem, is “terribly, terribly male-dominated”.

Any promotion demands such slog and sacrifice that women aspirants tend either to be veterans or very young. Mothers with small children who thrive in high-flying Labour and Tory ranks fall by the wayside in a party that champions equal rights but regards as illiberal the means to secure that goal. The upshot is a habitat which any steamy-breathed old lecher might dream of annexing as his personal Stringfellows.

Mr Clegg, used to juggling child care and careers, might have noticed how few Lib Dem women live similar lives, except that observation is not his strongest suit. Hence, when “non-specific concerns” over Lord Rennard’s conduct reached him, he failed to ask what those might be. That omission, curious in any party leader, was doubly remiss, given that Lord Rennard had confirmed him in that post after declining to count late postal votes which would, it is said, have handed victory to Chris Huhne.

Wilful ignorance, though offering no proof of culpability in British law, is a dubious defence. As Plato wrote: “The real tragedy of life is when men are afraid of the light.” The grudging disclosure of who knew what suggests, at the least, that the Lib Dem leadership prefers to live in the dark. This troglodyte tendency may yet prove Mr Clegg’s undoing.

If so, the timing would be bitter. Despite many mistakes, he has been a brave and occasionally enlightened leader whose fortunes were finally showing some signs of an upturn. Labour’s adoption of a mansion tax was a fillip for Mr Clegg, while Eastleigh would, according to Lib Dem expectations, have been a moment of triumph.

In that scenario, Mr Clegg, blessed with a workmanlike local candidate, could guarantee to see off David Cameron and his floundering Tory challenger while also profiting from Labour’s latest dose of Southern discomfort. With a Conservative Chancellor failing, on his own terms, to get to grips with economic recovery, many think Ed Miliband should be doing better than the Eastleigh polls are indicating, even in a seat ranked 258th on his winnable list.

John Denham, the canny lieutenant heading Mr Miliband’s Southern Taskforce, is more optimistic. In his view, Eastleigh voters are “open” to Labour persuasion. According to Mr Denham’s soundings, building support and winning target seats in the South is “feasible and achievable” by 2015.

For now, however, the main story is the Rennard debacle. As the scandal deepens, some commentators are confecting a hierarchy of harassment with Jimmy Savile at the pinnacle, followed by predatory priests and, at the bottom of the spectrum, political sex pests. Implicit in this premiership of perversion is the obnoxious notion that women should swat off unwanted attention and make less fuss.

That view ignores the poisonous effect of secrecy. This week the much-needed Defamation Bill, intended to stop Britain being the libel capital of the world, came closer to being scrapped after the Lords upheld pernicious amendments by the Labour peer, Lord Puttnam, which would greatly abet those seeking to keep disreputable conduct out of the media.

In France, Dominique Strauss-Kahn, the disgraced former head of the IMF, went to court yesterday to try to stop publication of a book by a former mistress who calls him a “pig”. DSK, whose sexual history might never have been unveiled but for the complaints of a New York hotel cleaner, came within a hair’s breadth of the French presidency because of his country’s adherence to laws and habits that shield the secrets of those in power.

British enthusiasts for muzzled media should consider the parables of the “Pig” and the “Octopus” and be grateful that Britain is still a country where allegations, however carefully suppressed, tend to surface and where the truth – whatever it may be in the Rennard case – will ultimately prevail.

Meanwhile, in Eastleigh, the day of reckoning is almost here. If the Lib Dems lose, then their leader’s future will be in serious doubt. But even if a formidable local party machine and voters’ indifference to metropolitan scandals combine to secure victory, Mr Clegg’s difficulties will be very far from over.

As Scotland Yard launched its inquiry into the Rennard case, Lib Dem support dipped to a record low of eight per cent. That nadir is a measure of public disgust. Among the political classes, plenty of people blame Mr Clegg’s plight on bad luck, or his party’s relative amateurism and inexperience, or even on the women who have finally dared publicly to complain.

The electorate is not so forgiving. In an age, and in a party, where those in power preach virtue, fairness and trust, to offer less is to court nemesis. Mr Clegg must produce a plausible account of his own and his henchmen’s roles in the Rennard scandal. If he cannot, then voters baffled by what the Lib Dems are for will gladly inscribe an epitaph reading “Non-Specific Concerns” on his political headstone.

Queen issues formal decree to guarantee princess title if Duchess of Cambridge has a girl

The Queen has issued a formal decree to grant the title of prince or princess to all of the Duke and Duchess of Cambridge's children.

Using Letters Patent, a method by which the sovereign can give orders without the involvement of Parliament, the Queen decided that from now on "all the children of the eldest son of the Prince of Wales" should be given the title of Royal Highness "with the titular dignity of Prince or Princess prefixed to their Christian names".

Until now, only the eldest son of the eldest son of the Prince of Wales was entitled to the honour, following a decree made by George V in 1917, meaning that if the Duke and Duchess of Cambridge have a daughter later this year she would have been known as "Lady".

But the Queen's formal ruling, officially made on December 31 but only now made public, means that not only the eldest child but all children of the Duke and Duchess will be princes and princesses.

A formal announcement in the London Gazette reads: "The Queen has been pleased by Letters Patent under the Great Seal of the Realm dated 31 December 2012 to declare that all the children of the eldest son of the Prince of Wales should have and enjoy the style, title and attribute of Royal Highness with the titular dignity of Prince or Princess prefixed to their Christian names or with such other titles of honour."

The Government has already begun the process of altering the laws of succession to ensure that the Duke and Duchess's first child will become monarch, removing the ancient rule of male primogeniture which gave precedence to boys.

However, the Queen's decree, in specifying that the royal titles are only given to the children of the Prince of Wales's eldest son, means that if the Duke and Duchess have a daughter, she will not be entitled to give her own children the title of prince or princess.

The Duchess celebrated her 31st birthday today by spending time privately with her husband, who had time off from his job as an RAF Search and Rescue pilot.

The Duke is understood to have travelled to the South East from his base in Wales to spend time with his wife in London.

Sir Jimmy Savile was a 'predatory sex offender', police say

Police called Sir Jimmy Savile a “predatory sex offender” as it emerged that he is now suspected of abusing up to 25 young girls in allegations dating as far back as 1959.

In the first official estimate of the scale of his crimes, Scotland Yard said its team was pursuing 120 separate lines of inquiry against the late BBC presenter.

So far eight criminal allegations have been formally recorded against him, two of rape and six of indecent assault, involving girls aged between 13 and 16.

Police said Savile had a “predilection” for young girls and that his offending was on a “national scale” and went on for four decades.

Officers are in contact with Stoke Mandeville and Leeds General Infirmary hospitals, where he did charity work and volunteered, about the possibility that he abused patients there as well as in his BBC dressing room. He is also said to have preyed on girls from Duncroft Approved School in Surrey and the Haut de la Garenne children’s home in Jersey.

The corporation’s own investigations unit is co-operating with the Metropolitan Police while 10 officers will take statements from the “brave” women who have come forward to say Savile took advantage of them. The investigation, called Operation Yewtree, could involve between 20 and 25 victims.

With support from the NSPCC, which has fielded some 40 calls in the week since ITV disclosed the first accounts from Savile's victims, the Met will compile a report within a few months on what can be concluded and what lessons should be learned.

Commander Peter Spindler, the Met’s head of specialist crime investigations, told the BBC: “At this stage it is quite clear from what women are telling us that Savile was a predatory sex offender.”

The new evidence prompted renewed claims that senior figures at the BBC must have heard the rumours about one of its star performers, and should have taken action years ago.

Rob Wilson, the Conservative MP for Reading East, said: “The scale of the allegations against Sir Jimmy Savile is staggering. I have spoken to a number people who worked within the BBC in the 1980s and they tell me that Savile’s behaviour was common knowledge within the corporation. If this was the case, did any senior manager look into the rumours? If they did not, why not? My big concern is that the BBC had a misogynist culture, where younger women in particular were not treated as equals and incidents of sexual harassment and groping were not uncommon.

“The BBC has been dragging its feet ever since this story broke and it is causing it enormous reputational damage. The BBC needs to begin an independent inquiry into the culture and management of the organisation so that license payers can have faith that noting uncomfortable for the corporation will be covered up or swept under the carpet.”

Panorama, BBC 1’s flagship investigations programme, is expected to make a programme about the Savile scandal, after BBC 2’s Newsnightshelved its exposé last year.

The Met said it will also pursue investigations against others who helped procure girls for Savile or joined in his abuse.

Bernard Hogan-Howe, the Commissioner, said his force would be “asking questions” of those still living.

Freddie Starr, the veteran comedian who has been accused of groping a girl in Savile’s dressing room in 1974, appeared on television to deny the claims and insist he would welcome a police investigation.

He told ITV News: “To be accused like this is devastating. I’ve got to fight back.

“I will take this evidence down to the police station and show them. I want a police investigation. I want them to interview me.”

As the backlash against Savile continued to grow, his family decided to take down his elaborate headstone “out of respect for public opinion”.

The triple headstone, only unveiled last month, will be removed from his grave in Scarborough. A clifftop path named after him has been dismantled while a memorial plaque has been vandalised.

Earlier the Prime Minister had hinted that Savile could become the first person to be stripped of their knighthood posthumously.

David Cameron told ITV1’s Daybreak: “We have something called a Forfeiture Committee. It is not chaired or sat on by me but it is responsible for looking at honours and the removal of honours, and obviously they have to do their job too.”

The Cabinet Office insisted that honours cease to exist when a person dies, although there is a campaign to change the law so that they could be revoked after death.

Parents of Shafilea Ahmed sentenced to 25-years after being found guilty of her 'honour' killing

A Pakistani couple murdered their westernised daughter because they were more concerned about shame in their community than about their children, a judge said.

The parents of Shafilea Ahmed, Iftikhar and Farzana Ahmed Photo: PA

Iftikar and Farzana Ahmed, strict Muslims who are first cousins from the same village in Pakistan, were jailed for life after being found guilty of the 2003 honour killing of their “determined” and “ambitious” daughter Shafilea. They were told they would serve at least 25 years.

They suffocated the 17 year-old in front of their four other children at their home in Warrington, Cheshire after she rejected a forced marriage in Pakistan.

The couple escaped justice for almost nine years, accusing officers of victimisation and stereotyping for suspecting them after her body was found months later in a river in Cumbria.

Duke and Duchess of Cambridge's honeymoon pictures published

An Australian magazine has published photographs of the Duke and Duchess of Cambridge strolling on a beach during their honeymoon in the Seychelles.

The Duchess and Duke of Cambridge on the day after their wedding April 30, 2011 Photo: John Stillwell/PA

The sixteen photographs, which appear in the latest issue of Woman's Day magazine, include images showing the Prince in floral swimming shorts and his wife in a black bikini.

The location of the 10-day honeymoon, North Island in the Seychelles, was known to several British media outlets but they had promised not to publish photographs.

It is not clear how Women's Day, a monthly tabloid magazine, acquired the photographs of the royal honeymoon, which appeared to be taken with a long lens.

The magazine featured a cover photo of the couple holding hands on a beach and included 15 more images inside.

The headline – "Our Island Paradise" – prompted criticism that the magazine appeared to be suggesting the couple had endorsed publication of the images.

The magazine's executive editor did not return The Daily Telegraph's calls.

The royal couple had insisted on privacy for the honeymoon.

A spokesman for the Duke and Duchess said: "It's a very private moment and we would ask people to respect that privacy, as we did at the time."

Australian tabloid magazines have previously published controversial photographs of the royals, clearing the way for the British media to publish.

Most famously, New Idea magazine, then owned by Rupert Murdoch, scooped the world in 1993 with publication of the so-called Camillagate transcripts – the intimate phone conversations between Prince Charles and Camilla Parker Bowles, with whom he was then having an affair.

The same magazine broke a British media blackout in 2008 to reveal that Prince Harry was fighting with the British Army in Afghanistan – a story that prompted army chiefs to send him home.

M6 toll: Motorway closed after anti-terror police stop coach

Part of the M6 motorway was closed this morning after police stopped a coach following warnings of a potential terror related incident on board.

It is understood police received a call from a passenger on board the coach who was concerned about the activities of another passenger. 

Police shut a large stretch of the M6 Toll Road near Lichfield in Staffordshire in what they described as a “major police led incident”.

It is understood police received a call from a passenger on board the coach who was concerned about the activities of another passenger.

One source claimed the passenger had become worried after spotting a smoking liquid on board the bus.

Staffordshire police were called at 8.20am and closed the motorway in both directions between junctions T3 and T4.

It is understood the south bound coach, which belonged to the Megabus company, had already pulled over to the hard shoulder when police arrived at the scene.

A spokeswoman for Megabus, which is operated by Stagecoach, said: "We are assisting police with their inquiries into an allegation made against a passenger who was travelling on board one of our services."

The coach was travelling from Preston to London.

The incident, which occurred at the height of rush hour, brought chaos to the road network in the area.

It is believed armed police were at the scene but Scotland Yard were not thought to be involved.

A spokeswoman for Staffordshire Police said: “There is currently an ongoing incident on the M6 Toll at Weeford, near Lichfield.

“Both lanes of the toll road have been closed while police deal with the incident.”

The incident came as six people were held in London over a possible terror plot involving Islamist extremists targeting the UK.

The two operations were understood to be unconnected however and police sources claimed the terror plot was not connected to the upcoming Olympic Games.

Police in London swooped in a series of dawn raids at addresses in the capital detaining five men and a woman on suspicion of the commission, perparation or instigation of acts of terrorism.

During the raids a 24-year-old man was Tasered but did not require hospital treatment, a spokesman for Scotland Yard said.

Those detained included a 29-year-old man, who was arrested in the street in west London, a 21-year-old man and a 30-year-old woman were held at separate residential premises in west London, and two other men, aged 18 and 26, who were arrested with the 24-year-old in east London.

Some of those held are understood to be British nationals.

The spokeman said: "Searches under the Terrorism Act 2000 are being carried out at eight residential premises in east, west and north London and one business premises in east London. Public safety remains our overriding concern."

UK terror convict testifies in US about Bin Laden meeting

Saajid Badat refused to appear in person as he is still wanted in the US

Continue reading the main story

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A British man jailed for plotting to blow up a plane has admitted meeting Osama Bin Laden, in a taped testimony for a US terror trial in New York.

Saajid Badat, 33, told the trial of Adis Medunjanin - accused of plotting to attack the city's subways - that he met Bin Laden in Afghanistan in 1999.

It is the first time a terrorist convicted in the UK has testified at a terror trial abroad.

His sentence was cut in exchange for his testimony and he has been freed.

On Monday, British prosecutors revealed that Badat's UK 13-year sentence had been reduced by two years. Jailed in 2005, he has been described an al-Qaeda supergrass.

Badat, from Gloucester - who would otherwise have been released in July two-thirds of the way through his term - was freed in March 2010, the Parole Board said.

He refused to appear in person, as he remains under indictment in Boston on charges of conspiracy with would-be British shoe-bomber Richard Reid.

"If I go to the United States, I'll be arrested," Badat said on the videotape played in a federal court in Brooklyn, New York.

Mr Medunjanin, 27, a naturalised US citizen, is accused of travelling to Pakistan with two friends in 2008 and receiving terror training from Bin Laden's network. The other two men have pleaded guilty and testified against him.

Badat had no involvement with the three, but prosecutors wanted to use his testimony to corroborate what Mr Medunjanin's friends have said about al-Qaeda's training methods.

US prosecutors and defence lawyers interviewed Badat in late March, before the trial began.

Badat said he had "direct interaction" with Bin Laden more than once in Afghanistan, and that Badat had agreed to blow up a plane using explosives hidden in his shoes.

But while Reid went ahead with the plot, Badat backed out, and was later arrested and convicted of conspiracy.

The bulk of Badat's evidence will be heard when the trial resumes on Monday.

Border Agency still failing on basics, say MPs

The UK Border Agency is still failing in its "basic functions" in spite of efforts to overhaul it, MPs have said.

The home affairs committee said UKBA had provided "inconsistent" information about immigration and asylum cases dating back to 2006 and this backlog would take four more years to clear.

It also said it was "deeply concerned" about the number of foreign prisoners living in the UK awaiting deportation.

Immigration minister Damian Green said "past mistakes" were being dealt with.

The UK Border Agency - responsible for securing the UK border at air, rail and sea ports and migration controls - was set up in 2008 following the then Labour Home Secretary John Reid's 2006 declaration that the Home Office's immigration directorate was "not fit for purpose".

Borders row

The organisation is now being split into two in the wake of a row last year over revelations that hundreds of thousands of people were let into the country without complete checks. The row led to the resignation of the head of the UK Border Force, Brodie Clark.

The UK Border Force, the section of the agency that manages entry to the UK, is to become a separate law-enforcement body reporting directly to the Home Office while the UKBA will be solely responsible for immigration policy work.

Continue reading the main story

“Start Quote

UKBA appears unable to focus on its key task of tracking and removing illegal immigrants, overstayers or bogus students from the country”

Keith VazHome affairs committee chairman

In its latest report on the workings of the UKBA, covering the period between August and November 2011, the cross-party committee suggested the agency was still not getting a grip on the backlog of approximately 450,000 asylum and immigration cases which emerged in 2006.

Last year UKBA officials said a preliminary decision had since been made in all these cases. Of about 365,000 cases where the individuals could be traced, it said 18,000 remained unresolved.

But the committee said new evidence it had seen in recent months suggested the UKBA was dealing with 1,500 more "live cases" than previously indicated and it was unclear where some of these had originated from. It called on the agency to "clean up and clarify" the figures.

"The agency must rid itself of its bunker mentality and focus on ensuring that Parliament and the public understands its work," the MPs said. "Confusion over figures only risks suspicion that the agency is attempting to mislead Parliament and the public over its performance and effectiveness."

There are currently 118,000 cases where individuals cannot be located. MPs said, at the current rate of progress, this would take four years to clear and this was "unacceptable".

In its last report, in November, the MPs said the cases had effectively been "dumped" in an archive and the agency had given up on them.

'Better decisions'

The committee said it was also taking too long to consider whether foreign nationals could be deported at the end of their prison sentences. It said it would be seeking an explanation from officials for why the number of deportations fell in the past year and the exact nature of "obstacles" standing in the way of deportation cited in one in four cases.

While the MPs said they welcomed the reduction in the number of prisoners released without being referred to the UKBA for possible deportation, the committee said there were 3,940 former foreign inmates living in the community - 2,670 of whom were still awaiting deportation after two years.

Labour MP Keith Vaz, who chairs the committee, said more needed to be done to tackle the use of false identities and absence of basic documentation hindering the process.

"The reputation of the Home Office and, by extension, the UK government is being tarnished by the inability of the UK Border Agency to fulfil its basic functions," he said.

"The foreign national prisoner issue and the asylum backlog were scandals which first broke in 2006, six years ago. UKBA appears unable to focus on its key task of tracking and removing illegal immigrants, overstayers or bogus students from the country."

He added: "Following the border controls saga, we now have two agencies instead of one. We are hopeful that UKBA will now concentrate fully on the issues that are causing so much concern to the public and Parliament."

Mr Green said the UKBA was publishing more information about its performance than ever before, making it more accountable.

"At the same time as clearing up the mistakes of the past, we are taking the action necessary to ensure the same errors will not be allowed happen in the future," he said.

"We are starting the deportation process earlier and removing foreign criminals more quickly than ever. We are now making better asylum decisions, ensuring cases are properly tracked, improving intelligence and speeding up removals."

MPs 'will not be forced to support gay marriage’

MPs will not be forced to vote in favour of legalising gay marriage, a Cabinet minister has said, as the Government promised to listen to critics of the plans.

Francis Maude told The Daily Telegraph that the Government would listen to critics and would not force MPs who oppose the plans to vote for them 

A formal Home Office consultation is being launched to examine how reforms to civil marriage laws could be introduced.

Homosexual rights campaigners have welcomed the plans, which have been championed by the Prime Minister and would give the country some of the most advanced equality laws in the world.

However, the proposals have provoked criticism from Christians, including the Archbishop of York and the Roman Catholic Archbishop of Westminster.

Conservative MPs and ministers have also expressed their concerns over the plans, with some said to be prepared to resign over the issue.

Francis Maude, the Minister for the Cabinet Office, and a supporter of the reforms, told The Daily Telegraph that the Government would listen to critics and would not force MPs who oppose the plans to vote for them.

“The consultation will come out, we will listen to what people say as a government,” he said. “Obviously, it is an issue of free votes and MPs will form their own views. My views are pretty well known.”

Mr Maude, whose brother died from Aids, has been persuaded that the Conservatives’ past opposition to gay rights had become a symbol of the party’s “intolerance” that made the Tories seem “unacceptable and unelectable”.

However, his views are not shared by all in the party. One minister told The Daily Telegraph: “We do not need to be having this debate.”

David Burrowes, the Conservative MP for Enfield, Southgate, warned that churches could face legal action forcing them to hold gay weddings.

In a commentary for The Daily Telegraph website , Mr Burrowes, said: “This debate is as much about freedom for people to express their belief as it is about equality.

“Whilst I applaud commitment and fidelity in all relationships, in the case of same sex couples marriage is not the right vehicle. Civil partnerships present a great way for gay couples to publicly express their love for one another.”

The consultation on the plans was being launched as the leader of the Roman Catholic Church in England and Wales suggested the minister responsible, the Liberal Democrat equalities minister Lynne Featherstone, had missed the point in the debate.

The Archbishop of Westminster, the Most Rev Vincent Nichols, said that her argument that neither the Church nor the state “own” marriage ignored the “ethical consequences”.

“Defending the Government’s proposal, the equalities minister insisted that marriage 'is owned neither by the state nor the Church ... it is owned by the people’ as if this was an argument that removed the need for further discussion of the proposal’s ethical consequences,” he said.

“On the contrary, there is a clear and constant argument from reason for defining marriage as being between a man and a woman, corresponding to the underlying pattern in our nature of the complementarity of male and female, their potential fertility and subsequent responsibility for the care of children.”

Meanwhile, Tony Blair, the former prime minister who converted to Catholicism, has been rebuked by the Vatican over his support for the reforms.

Archbishop Rino Fisichella, who heads Pope Benedict’s Council for the New Evangelisation, said Mr Blair needed to “examine his conscience carefully”.

Coalition lacks vision, says Vince Cable

Vince Cable, the Business Secretary, has admitted in a leaked letter that the Government lacks “a compelling vision of where the country is heading” after the financial crisis.

Business Secretary Vince Cable criticises the Government’s failure to develop a coherent industrial policy 

The Liberal Democrat minister described elements of the Government’s economic policy as “frankly, rather piecemeal” and said it was not clear how Britons would “earn our living in the future”.

The leaked letter, sent by Mr Cable to David Cameron and Nick Clegg last month, is evidence of a growing rift between the Conservatives and Liberal Democrats over economic policy in the run-up to the Budget. Senior Liberal Democrats have broken with recent convention by being increasingly vocal in their demands for new taxes on expensive properties to fund greater tax breaks for low-paid workers.

There are also growing disagreements over policies to boost economic growth with the Conservatives blaming Mr Cable for blocking initiatives to cut unnecessary red tape for private firms.

In his five-page letter sent to the Prime Minister and his deputy on Feb 8, Mr Cable criticises the Government’s failure to develop a coherent industrial policy.

After praising Coalition measures to restore the public finances, the letter says: “I sense, however, there is still something important missing: a compelling vision of where the country is heading beyond sorting out the fiscal mess; and a clear and confident message about how we will earn our living in the future.”

• The Business Secretary said that his experience working in the oil industry at Shell had taught him about the “difficulties of long-term planning”. He added: “But that experience did teach me the importance of thinking a decade or two ahead, beyond the electoral angle, which our top industrialists are clamouring for.”

Mr Cable warned that multinational firms may scale back their activities in Britain, in response to a “lack of strategic pro-growth thinking in previous administrations”. He blamed the Government for not doing enough to identify and support “key technologies” and said ministers should be “willing to identify British success stories”. The minister also pointed out that, despite having strong small and medium-sized companies, “we have produced no Amazon, no Google and no Intel.”

One of the only firm recommendations made by Mr Cable is that the Government should “recognise that RBS will not return to the market in its current state”. He therefore proposed that part of the nationalised bank be turned into a “British business bank” that would back companies identified as being of “strategic importance”.

He also said that more should be done to boost house-building. The letter said: “The economy will continue to struggle while the construction industry remains so depressed. By contrast, the big recovery in the 1930s was driven by a combination of new industries (cars and chemicals) and construction: estates of semis and lots of council housing.

The letter was leaked just hours after Ed Miliband, the Labour leader, made a speech that called for a new industrial strategy for Britain.

Last night, John Cridland, the CBI director-general, said: “We need to learn lessons from the past, look again at how to make industrial policy work in practice, and put it firmly back into our plans for stimulating growth.”

The document baffled several senior Conservatives as Mr Cable is responsible for many of the policy areas he highlighted as problems. George Osborne is understood to be increasingly exasperated by Mr Cable, whom he sees as a major obstacle to boosting economic growth. Many senior businesses are now liaising directly with the Treasury and Downing Street as they do not feel the Department for Business is representing their needs.

Mr Cable began the day yesterday by openly discussing normally confidential budget negotiations. He said the Lib Dems would accept the scrapping of the 50p higher rate of income tax — if the Coalition introduced new taxes on property or wealth.

The Business Secretary said: “There is a broad understanding that if the 50p rate were to go, and I and my colleagues are not ideologically wedded to it — it should be replaced by taxation of wealth.

“The wealthy people of the UK have got to pay their share, particularly in times of economic difficulty. There are vast numbers of extraordinarily valuable properties around the country netting very large gains for their owners, many of whom come from abroad incidentally, and are not taxed at all.

“You get people with multi-million pound properties paying exactly the same in council tax as somebody living in a three-bed semi. That system doesn’t work at all.”

He also confirmed the Lib Dems were negotiating with Conservative colleagues over new ways to tax the wealthy. He said: “How exactly that is configured is a detailed matter for negotiation but that principle must be upheld.

“The mansion tax is actually a very economically sensible way of doing it.”

Senior Conservatives believe that the Lib Dems have “got carried away” in openly discussing wealth taxes. It is understood that Mr Osborne believes that the Coalition is a “long way away” from being in a position to announce any major change in the tax system. The Budget is expected to agree only to look at the possibility of property taxes on multi-million pound properties replacing the 50p rate.

A senior Tory source said: “Very little work has been done on any of these options and it is far from clear that these measures would raise enough money.” In a speech last night, the Chancellor said that he would not put Britain’s economic credibility at risk by offering “unfunded giveaways” in this month’s Budget.

“By facing difficult decisions head on, we have won the credibility which will allow us to constrain inflationary pressure, support long-term low interest rates and provided the stability that creates the space for private sector investment.

“I have a Budget in two weeks time. I can tell you: we are not going to put that credibility and stability and low interest rates at risk. The days of unfunded giveaways are over.”

Adverts for cheap alcohol could be banned

Supermarkets could be banned from advertising cheap alcohol under Coalition plans.

The Government is to announce its new 'alcohol strategy' within weeks

The ban, which would form part of the Coalition’s alcohol strategy, would see an end to retailers such as Tesco and Asda advertising money-off deals on beer, wine and spirits.

Promotional deals by supermarkets such as ‘3 bottles of wine for £10’ or half-price lager have been seen as contributory factors to the increase in binge drinking in the UK.

The move, which is still under discussion, would see the outlawing of TV and poster ads pushing cheap alcohol.

Supermarkets have used such advertising around ‘events’ such as football tournaments, bank holidays or Christmas in order to drive sales.

Last year British drinkers were expected to consume more beer from supermarkets than from pubs for the first time. This was partly due to the cost of a pint in the pub rising, but also to do with ever-decreasing prices in supermarkets.

A partial ban on advertising was implemented in Scotland last year, restricting alcohol advertising around supermarket premises.

An investigation by Alcohol Focus Scotland prior to the ban found that supermarket promotions and discounts increased sales by around 25 per cent.

The move in England and Wales would be part of a wider initiative by the Government to crack down on excessive drinking.

An aide to David Cameron told The Daily Telegraph: “The alcohol strategy will be published in a month or so. The PM has made very clear that he thinks the availability of cheap alcohol is a problem. It is not secret that this is an issue that the PM is concerned about.”

The Prime Minister also plans to introduce a minimum price for alcohol of 40p a unit.

The moves are likely to be opposed by drinks manufacturers, and particularly those in the beer and cider industries, whose sales would be hit by the new rules.

The Prime Minister is thought to be keen to push the changes through despite opposition from Andrew Lansley, the health minister, who believes that minimum pricing would hit people on low incomes hardest.

Retail groups said that attempts to cut down on binge drinking by raising the cost of alcohol would be unlikely to work.

Stephen Robertson, the director general of the British Retail Consortium, which represents the UK’s supermarkets, said: “Increasing the cost of alcohol would not achieve its desired goal of curbing alcohol abuse. People who abuse alcohol are not sufficiently susceptible to price for it to make any difference.”

“If the average yob chooses to drink ten cans of lager on a Saturday night and the price of a can is £1, then a 10 per cent increase is only going to cost him an extra pound.

“It is like reducing speeding by putting up the price of petrol.”

The Wine and Spirit Trade Association , said that it is committed to helping the Government tackle alcohol misuse.

However it said that initiatives such as minimum pricing is not the answer.

“Minimum unit pricing is a blunt tool which would both fail to address the problem if alcohol misuse and punish the vast majority of responsible drinkers. As Government ministers acknowledge, it is also probably illegal,” said a spokesman.

A spokesman for the Department of Health said that details of the alcohol strategy are still being put together.