Only Lib Dems offer real change, says Nick Clegg

Liberal Democrats are now the only party offering "real change" in the General Election, the party's leader Nick Clegg claimed today.

His claim stepped up the party's tussle with the Conservatives for ownership of the "change" mantle in the campaign for the May 6 poll.

Tory leader David Cameron sought to fight back against the Lib Dem surge in the polls last night, with a hastily-rewritten election broadcast warning that only his party can deliver change and that a hung Parliament would leave Britain "stuck" with Gordon Brown.

But responding to Mr Cameron's intervention this morning, Mr Clegg said: "Over the last few weeks, he has changed his policies, he has changed his ad agency and last night he changed his election broadcast, but that doesn't mean he can change Britain.

"The only party that now stands up for real change in the old economic and political order of this country are the Liberal Democrats."

Mr Clegg used a press conference in London to set out his party's plans to reform the banks by splitting retail activities from risky "casino" banking.

Accusing Labour of being "asleep at the wheel" as the banking crisis developed, Mr Clegg called for Goldman Sachs to be suspended as an adviser to the Government until a US investigation into its sub-prime mortgage deals is completed.

He launched a fierce attack on "reckless and greedy" bankers and said a Lib Dem government would look at remutualising Northern Rock, creating a Post Office bank and supporting credit unions, regional stock exchanges and local enterprise funds.

Recent polls showing Mr Clegg's party pushing Labour into third place - and in two cases seizing the top slot from the Conservatives - have intensified interest in the Lib Dems' programme and their approach if they hold the balance of power at Westminster.

Mr Clegg refused to say who he might co-operate with in a hung Parliament or discuss tactical voting, urging the electorate to "vote with your hearts".

"This election is now wide open," he said. "All bets are off.

"What we have learnt from the last few days is that anything is possible and that a growing number of people are starting to believe that we can do things differently."

Four polls released today put the Lib Dems in second place, with backing between 28% and 31%, against Conservatives scoring 32%-33% and Labour 26%-28%, in what now appears to be a true three-horse race.

Strategists for both of the major parties will be watching closely over the coming days for any signs that support for the Lib Dems has reached a high-water mark and is beginning to recede.

Mr Cameron was seeking to regain the initiative today by highlighting Conservative plans to cut the benefits of claimants who refuse work.

And Mr Brown was launching Labour's manifesto for growth during a series of campaign visits to marginal constituencies.

Mr Cameron will promise to implement Tory plans to cut the benefits of claimants who refuse reasonable offers of jobs or a place on a new "work programme" within six months of a Conservative government taking office.

Long-term benefit claimants who failed to find work would be required to "work for the dole" on community work programmes while incapacity benefits claimants will be reassessed to see if they are fit for work.

Mr Cameron will say: "The old way - the big government way - has failed. It's time to tackle welfare dependency a new way - the big society way.

"We're going to change the whole way welfare is done in this country so everyone takes responsibility and plays their part.

"This is our new welfare contract: do the right thing and we will back you all the way. But fail to take responsibility - and the free ride is over."

Meanwhile, Mr Brown will set out his plans to create the conditions for economic growth if Labour is re-elected for a fourth term.

"Our plan for growth sets out how we will back businesses and private sector investment as the main drivers of future prosperity," he will say.

"We know that wealth is created by the people who invest, manage and work in businesses across the country. But we also know that government must create the conditions within which firms prosper.

"The Conservatives believe that growth can happen by itself so long as government gets out of the way. But growth doesn't happen by chance. That is the economics of yesterday. Government is needed to pull away the barriers and obstacles that hold business back."

Business Secretary Lord Mandelson acknowledged today that Mr Clegg had to be taken seriously, but again turned his fire on the Tories, while shadow defence secretary Liam Fox highlighted some of the Lib Dems' more controversial policies, insisting he was not trying to "rubbish" the party or its leader.

Lord Mandelson told BBC Radio 4's Today programme: "I think Nick Clegg does have to be taken seriously because he has entered the fray and appealed to a lot of people who feel Labour has had a good innings, and feel it's someone else's turn, but who have looked at David Cameron's Tories and baulked at them becoming the government."

He said the "flux" in the polls was "real" and "palpable", but Labour and Gordon Brown had to show it had learned lessons in government and offer change on the economy, reform of the public sector and the political system.

"People are coming to the view that if they really want change in politics, they have got to change our political system," said Lord Mandelson, appealing to the Lib Dems' ambition for a change in the voting system.

Dr Fox said of the Lib Dems' poll surge: "We have got to take it seriously. There's no doubt the election has come alive, that the voters are energised."

He told Today: "People want change and increasingly in the next few weeks the message we want to get across is that only the Conservatives can offer change."

He highlighted Lib Dem policies on scrapping Trident, abolishing short prison sentences, an amnesty for illegal immigrants and joining the euro, adding: "This is not being out to rubbish Nick Clegg, this is to show people what they actually stand for."

Shadow chief secretary to the Treasury Philip Hammond said Mr Cameron should not use the second TV debate on Thursday to attack the Lib Dems but to present the positive case for the Conservatives.

"David Cameron needs to talk about Conservative policies, of course he does," Mr Hammond told Sky News.

"That's what he is out there to do - to show himself to the British people as a future prime minister and to show Conservative policies to the British people as the right policies for the British people to take Britain forward, get us out of the economic mess that Gordon Brown has left us in."

He added: "What has changed is that until the end of last week, no one was taking too much notice of Liberal Democrat policies.

"Now we need to shine a spotlight on those policies - and the media needs to do that as well - to make sure people understand what lies behind Mr Clegg and what his policies really are."

Mr Hammond restated Tory warnings about a hung Parliament: "What Britain needs in order to benefit from the recovery and put this recession firmly behind us is a government with a working majority and a clear mandate and a credible plan to get Britain out of the mess that Gordon Brown's left us in.

"That's what will support the pound, allow us to continue borrowing the very considerable sums that the Government needs to borrow, and I'm afraid that a hung Parliament would send all the wrong signals to our creditors and to investors.

"It would mean that business confidence remains low, and that means we wouldn't get the investment and the jobs that we so desperately need to turn this recovery into something solid."