Westminster 'seen with disgust', says Clegg

Mr Clegg was speaking at the Scottish Lib Dem conference in Perth

Liberal Democrat leader Nick Clegg has pledged to clean up politics in the wake of the MP expenses scandal and concern over party donations.

He told the Scottish Lib Dem conference the Westminster parliament was looked on with "disgust", rather than "pride".

Mr Clegg also set out his vision for a "fairer" society, through tax reform and a better start for children.

And he attacked Gordon Brown for backing the Iraq War in his evidence to the Chilcot inquiry.

On expenses, Mr Clegg told delegates in Perth he wanted the public to be able to sack their MPs, and backed a directly-elected House of Lords.

And he dismissed Tory donor Lord Ashcroft as a "tax dodger".

We need a vibrant, competitive financial sector, but never again should the greed of the bankers in the City of London hold a gun to the head of the rest of the British economy Nick Clegg Lib Dem leader

The peer's "non dom" status has caused a political row, because it had been thought he had agreed to pay full UK tax in order to become a peer.

Mr Clegg argued that there needed to be "fair, decent, transparent politics", arguing the Westminster expenses scandal was the "symptom of a deeper malaise" that had seen MPs "abusing the system on an industrial scale".

"We will deliver the new politics - fair votes, a directly elected House of Lords, clean up the murky business of party funding," he pledged.

Mr Clegg delayed his speech to react to Mr Brown's evidence to the Iraq inquiry.

The prime minister, who was chancellor at the time of the 2003 invasion, said he fully backed the action and insisted troops had all the equipment they needed.

But Mr Clegg accused the prime minister of betraying the public by supporting the war.

The Liberal Democrat leader outlined four steps to a "fairer Britain" - fair taxes, a fair start for all children at school, a rebalanced green economy and clean politics.

These included making first £10,000 of earnings tax-free, which would be paid for by closing tax loopholes exploited by the wealthy, spending more on schools and "breaking up the banks" to prevent another financial crisis.

Mr Clegg said a key priority was delivering an extra £2.5bn a year to schools, raising the money given to children on free school meals from the most deprived backgrounds to the amount that children tend to receive in fee-paying schools.

And he vowed: "In the first year of a Liberal Democrat government we will use £3.5bn from savings and cuts in the government expenditure we have identified to invest in a new economy - not the old economy, not the old economy of excess and greed, but the new sustainable green economy."

Mr Clegg hit out at the "greed of the bankers" but also attacked the "failure of Gordon Brown to keep that greed in check".

Main challengers

He said he wanted to "change the fundamental assumptions by which both Conservative and Labour governments at Westminster have sought to run the British economy".

"Of course we need a vibrant, competitive financial sector, but never again should the greed of the bankers in the City of London hold a gun to the head of the rest of the British economy," said Mr Clegg.

"So I say an end to the banking of excess and greed - split up the banks. Split up Lloyds. Bring the Bank of Scotland back home."

Turning to his other political rivals, Mr Clegg said the Conservatives had "elevated hypocrisy to an art form", and added that Scottish First Minister Alex Salmond was a "man who has elevated independence into a one-man fetish".

The Liberal Democrats have declared themselves as the main challengers to Labour in Scotland in the forthcoming general election.

Amid talk of a possible hung parliament at Westminster, a senior Lib Dem all but ruled out a power-sharing deal with Gordon Brown in the event of a hung parliament at Westminster after the election.

In a BBC Scotland interview at the Perth conference, Liberal Democrat Scottish affairs spokesman Alistair Carmichael said he could not imagine the circumstances in which his party would prop up a minority Labour government.