Soak the rich, quit Europe - its conference season

NICK CLEGG'S ultimatum to David Cameron to keep the 50p tax rate or impose other wealth taxes on the rich is designed to infuriate Tory grass-roots activists.

Clegg staked his ground on yesterday's Andrew Marr Show. This was followed by a populist speech by Danny Alexander in which he promised the Lib Dems at their Birmingham conference that the Treasury would crack down on the rich to make sure they pay more tax.

Vince Cable, the business secretary, will continue the 'soak the rich' theme today by unveiling plans to force companies to reveal pay, pension and shares packages for executives.

Clegg and Cameron reached an informal agreement to criticise each other's parties during the party conference season, but Tories are fuming that the deal has been abused by the Liberal Democrats after a weekend in which senior Lib Dems have attacked the Tories as 'ruthless' (Simon Hughes, the deputy Lib Dem leader) and brought up George Osborne's alleged use of a dominatrix and cocaine (both of which he denies).

The Tory-supporting Daily Mail has accused the Clegg and the Lib Dems of indulging in 'schoolyard' politics while Britain's economy burns. However, Clegg is happy.

He should be in deep trouble with his own party after a near wipe-out at the local elections and an opinion poll yesterday by ComRes showing the party on a suicidal 11 per cent but he knows the more he upsets the Tories, the more secure his own position with the Lib Dem rank and file will be.

On the 50p tax band, the deputy PM told Andrew Marr: "It stays unless we can first make more progress on lowering the tax burden on people on low and middle incomes, and secondly making sure, as the chancellor himself has said, we can find other ways the wealthiest can pay their fair share."

Clegg denied that he has done a deal with his wife to stand down as leader after one term. But he did not deny that his senior staff are busy drawing up their list of demands for a renewed coalition before the next election. Other previously obscure Lib Dems would rather plan for a coalition with Labour after the election (assuming there are still enough Lib Dem MPs to hold the balance of power).

Tim Farron, the Lib Dem president, told the party faithful: "I don't want to upset you and it is not going to happen for three or four years but I am afraid divorce is inevitable."

The Tories meanwhile are preparing for a showdown with Cameron at his own party conference in Manchester over his failure to deliver a referendum on withdrawing Britain from the EU to avoid upsetting the Lib Dems.

Their anger was given voice by Mark Pritchard, the secretary of the Tory backbench leadership, the 1922 Committee in today's Daily Telegraph. He called for an 'in or out' EU referendum next year.

And he warned Cameron that Tory voters would "kick back" if British taxpayers have to share the cost of shoring up the euro, because of the failure of "unreformed and lazy" eurozone countries such as Greece to introduce fully-fledged austerity measures.

Around 120 Tory MPs last week met to set out a eurosceptic agenda, including the repatriation of powers from Brussels to Westminster. But that has failed to mollify the Tory grass-roots.

The meeting was chaired by George Eustace, a former Tory press chief, and has the support of William Hague, the foreign secretary, so it is hardly a rebel outfit and its 'crime' is that it is prepared to work within the EU for change, rather than to pull out of Britain altogether.

The Mole predicts that Cameron has only one option - to follow Clegg's lead at his own party conference and put the boot into Clegg and the Lib Dems. ·