Mr Clegg said both the Prime Minister and David Cameron were treating the voters as if they were children who were "too young to know the truth".

He said: "Neither are willing to come clean on the difficult long-term savings we will need to make to balance the nation's books."

"It's like a big hoax: they trade insults and numbers but hide the truth." The public had been promised a vision based on decentralisation and personal entitlements but many of these entitlements were "just the recycled versions of old targets", he said.

"Last week you called a cut an investment. This week you are calling a target an entitlement. Can you tell us exactly what's the difference?"

The Liberal Democrat Leader concluded that the Prime Minister's statement was nothing more than a "hotchpotch of unrelated Whitehall schemes, a ministerial cut-and-paste job".

Liberal Democrat Shadow Foreign Secretary said; "He needs to either make clear what he knew about the torture policy or stand down as envoy. He cannot have it both ways."

"There are also serious questions to answer for both Jack Straw and David Blunkett. They had oversight of MI6 and MI5 at the time, and should have known about any guidance their agents had been given."

Edward Davey called for a debate over the guidance regarding the abuse of suspects under interrogation provided to the security services at Business Questions in Parliament today.

Ed concluded that "Parliament must be allowed a debate on the issue of oversight of guidance on interrogation and the current Justice Secretary, given his long-term involvement in this issue, should respond for the Government."

The figures, calculated by the House of Commons Library show that the cost of depression in lost earnings have risen by £3bn since 1999.

Commenting, Liberal Democrat MP Jo Swinson, who chairs the All Party Parliamentary Group on Wellbeing, said: "This is shocking evidence of the dramatic scale of the cost of depression in this country."

"Unemployment is already growing. In this financial crisis we can no longer afford to ignore the preventable causes of depression that are all around us. High levels of unsecured personal debt, job insecurity and workplace stress all damage our wellbeing."

"Unemployment itself also contributes to depression. Depressed people often find it difficult to work and people out of work often get depressed."

"More Government focus on mental health and wellbeing makes economic sense. Measures to tackle workplace stress, encourage responsible lending and keep people in work would benefit us all. Ministers can no longer allow mental health care to be a Cinderella service."

George Osborne avoided £55,000 in capital gains tax by 'flipping' his second home allowance, figures calculated by the Liberal Democrat treasury team have revealed.

Mr Osborne claimed his second home allowance on a London property for two years which he later sold for £1.48m - a £748,000 profit. He did not pay capital gains on this because he had declared it as his main home since 1998, despite claiming mortgage interest payments on it from the House of Commons.

The capital gains liabilities for those two years would amount to £54,948.

Reacting Matthew Oakeshott said; "This is a real test of David Cameron's leadership. He blackballed his country gentlemen with their moats and duck houses before their feet could touch the ground. But will he make his Shadow Chancellor pay back the tax he's dodged?"

George Osborne used his second homes allowance on a London property and then switched it to a large farmhouse in his Cheshire constituency of Tatton. He bought the Cheshire residence ten months before he won his Tatton seat in 2001. Instead of taking out a mortgage on the farmhouse he increased the mortgage on the London property which he bought for £700,000 in 1998.

George Osborne designated the London house his second home, even though it was his main residence, so he could claim mortgage interest payments. Two years later he took out a separate £450,000 mortgage on the farmhouse, made that formally his second home, and has since claimed £100,000 on it. It is claimed that Mr Osborne was able to reduce the mortgage on his London home to less than £200,000 before he sold it for £1.48million in 2006, making a £748,000 profit. He did not pay capital gains because he had declared it his main home since 1998 with the tax authorities - despite the two years it was formally designated as his second home with Commons officials.

Matthew Oakeshott concluded; "You can't tell the taxman one story and the fees office another. It looks like Cameron has either got one rule for the Notting Hill set and another for the knights of the shires, or that George Osborne is simply too close to chop."

"Unless Osborne pays the tax both he and Darling will be a pair of flippers."

The Liberal Democrat Shadow Health Secretary, will accuse the Government of ignoring the scale of the dangers facing the NHS and discuss the need for a new approach.

He will also say that this can only be achieved by devolving accountability and financial responsibility to a local level and by empowering patients and the NHS workforce.

In his speech Norman will say; "We are facing the lull before the storm. The last decade has been the years of plenty. We supported the Government with a programme of increased investment in public services."

Choose a topic to find out more about Norman Lamb's and the Liberal Democrat's plans for a new approach for the NHS.

• Dismantling a highly centralised bureaucracy >>
• Getting the financial incentives and economic levers working >>
• Liberating this remarkable workforce >>
• Empowering patients >>

Last week at Prime Minister's Questions I suggested to Gordon Brown that the real choice in British politics is now between the Conservatives and the Liberal Democrats.

The Labour front bench howled with joy, merrily dismissing the possibility that their party might be in serious decline as a laughing matter. The next day, the Labour Party's national vote in the local elections stood at 23 per cent and the Liberal Democrat vote rose to 28percent.

We destroyed the Labour vote in exactly the areas that we intend to win at the next general election - in Burnley, for example, a former Labour stronghold, we won five of the six county council seats from them. In a council division that we won in Cumbria the Labour vote collapsed from 1,900 to 185.

I have heard people claim that the local and European elections were a missed opportunity for the Liberal Democrats. I disagree. Background of course, as in all elections, there were losses as well as gains. In a contest when the voters wanted to give the Establishment a kicking, it is hardly surprising that we suffered some losses in the South West, where we have been the governing party for 20 years.

And in a Euro election in which many voters cast protest votes for fringe parties, no mainstream party leapt forward. But the Liberal Democrat and the Conservative vote remained broadly static, with both parties winning one extra MEP.

So I repeat my belief that the Liberal Democrats can replace Labour as the progressive party in British politics.

Political parties are not facts of life, cast in stone for ever. They change, waxing and waning with the times. It may not happen overnight: it took Labour 23 years from its formation in 1906 to become the biggest party in Parliament.

The Lib Dems are now the dominant political party of urban Britain, running the majority of big cities outside London, while the Conservatives remain invisible in northern city politics. And we are present throughout the South and South West just as Labour disappears from these regions altogether. This is the platform from which we can overtake Labour.

If it takes a little time to progress in the battle for numbers, we are already winning the battle of ideas: we were first to identify the dangers of an overleveraged banking system at the heart of the British economy; and the first to advocate radical political reform, changing the rotten system in Westminster for good. We have been consistent in our defence of civil liberties; outspoken about the need to clamp down on tax avoidance, to reduce the tax burden on low and middle-income earners, and so make taxes fairer. We remain radical on the need to make Britain environmentally sustainable; principled in our defence of the international rule of law; brave in standing up to failed populism on law and order; and progressive in pushing for new childcare and education policies, to break the cycle of deprivation that, after 12 years of Labour, is still handed down from one generation to the next.

These are the touchstone issues of progress, of reform, of conscience where Labour has proved such a disappointment. Perhaps it was Iraq. Perhaps it was the tortuous compromise at the heart of new Labour - sticking to hard-nosed Thatcherite economics while promising a gentler Britain, promising progress while out-toughing the Conservatives on crime and civil liberties. Perhaps it is simply the grinding struggle of day-to-day government after 12 exhausting years.

Whatever the reason, Labour has let down the millions of people who looked to it in the hope of a new progressive start in 1997. It has delivered, instead, unreformed politics, overcentralised government, diminished civil liberties, a confused approach to foreign affairs and the environment, and a society still disfigured by profound social injustice.

We must do better than this. And we cannot allow David Cameron to turn the clock back. He may talk a good talk, but the effects of a Conservative government are now becoming clear: they say that they want fairness, but advocate tax cuts for millionaires; they say that they want to protect the environment, but seek out allies in Europe who are climate-change deniers; they say that they want clean politics, but block any change to party funding.

So Britain desperately needs a strong progressive voice. Labour has run out of road, out of ideas, out of steam. Voters looking for a new home will only secure the fairer Britain that they want by uniting around a new centre of conscience and reform.

That is why I now say to anyone who supported Labour in 1997 because they wanted fairness; they wanted to support, not demonise, young people; they wanted political reform, they wanted the environment protected; or because they simply believed in a better future - turn to the Liberal Democrats. We carry the torch of progress now.

This article first appeared in The Times - 10, June 2009.

Nick Clegg's statement in full.

I welcome this deathbed conversion to political reform from the man who has blocked change at almost every opportunity for the last twelve years.

Everyone knows the Labour party will lose the next General Election. So any reforms must be in place before the election if they are to mean anything at all. Anything else would be a betrayal of the British people, who are angry and demanding we change our rotten political system for good.

Doesn't he see this is no time for more committees, more reviews and more consultation - we've been debating these issues for decades - isn't it now time to get things done?

I strongly welcome the Prime Minister's commitment to moving towards an elected House of Lords.

But will the Prime Minister give us a date by which this reform will be complete? We've already voted on it in this place: there should be no more delay.

I also strongly welcome the move towards a Parliamentary Standards Authority and a MPs Code of Conduct. These changes should be implemented immediately with no more delay.

So will he ask this House to forego its summer recess so that we can push through all the necessary changes to clean up politics?

And will he make sure his immediate proposals include the right for people to sack their MP if it has been shown that they have done something seriously wrong?

I am dismayed that the Prime Minister is completely silent on the issue of party funding. How on earth can he possibly justify it? We cannot allow our politics to go the way of America's, where elections have become a contest of advertising budgets, not ideas.

Why delay when he could just implement the Hayden Phillips recommendations in the Party Funding Bill that's already being debated in another place? The way forward's been agreed - so will he now act?

Turning to electoral reform, I welcome any movement away from our discredited system. A system which gives his government untrammelled power when only one in five people voted for them. A system which gives MPs safe seats for life. As Robin Cook recognised, as his new Home Secretary realises, this can't go on.

So why is he seeking to restart a debate on electoral reform? We've had the debate. Roy Jenkins' report, the independent Power Inquiry. We can't afford to wait for a cross-party consensus because the Conservatives will never want to change this cosy Westminster stitch-up.

We don't need to wait for his Cabinet to make its mind up. It's not up to them to decide how our democracy works. People should now be given a say. So will the Prime Minister now call a referendum, this Autumn, to give people a choice? A choice between the bankrupt system we have now. The timid option of Alternative Vote, a baby step in the right direction. And serious proposals for reform like Roy Jenkins' AV+ or better still the Single Transferable Vote?

He has nothing to lose. This is no time for his trademark timidity. Just get on with it. Will he now cancel the recess? Pass the legislation we need? And give people the say they deserve?

The call comes in response to media reports that an inquiry could be announced this week and stresses the need for a genuinely transparent process, centred on the high-level political decisions taken in the run-up to the war.

Edward Davey said; "The Iraq war was the worst British foreign policy disaster since Suez."

"The scale, scope and conduct of an inquiry must reflect this, not merely the political woes of Gordon Brown."

The Liberal Democrat Shadow Foreign Secretary went on to say; "The country simply will not stand another whitewash on Iraq. With trust in Government and Parliament at an all-time low, there is no alternative but for unprecedented transparency and consensus in the conduct of this inquiry."

Ed concluded; "It is extremely worrying that decisions appear to have already been made, without any discussion in Parliament or correspondence between our parties."

Dear David,

Recent press reports suggest the Government is on the brink of announcing an inquiry into the war in Iraq and that designs on both its remit and make-up are already well-advanced.

While I welcome this new-found speed in setting up an inquiry, the suggestion that it is driven by the political woes of the Prime Minister is deeply troubling. That opposition spokespeople have to read these reports in the newspapers and not hear them in Parliament will leave many in dismay, particularly in the current political climate.

The Iraq war is one of the gravest foreign policy disasters ever to beset this country. The scale, scope and conduct of an inquiry must reflect this, not the fortunes of the Labour party and its Leader, however beleaguered. The country simply will not stand another whitewash on Iraq. With trust in Government and Parliament at an all-time low, there is no alternative but for unprecedented transparency and Parliamentary consensus over the remit and conduct of this inquiry.

That is why I am very concerned that it appears that decisions have already been made, without any discussion in Parliament or correspondence between our parties. I have already made it clear to you that the Liberal Democrats will welcome a Privy Council inquiry, but only with the utmost openness and transparency, and with the greatest number of hearings and deliberations carried out in public.

An inquiry must be centred on the highest levels of political decision-making in the months leading up to the invasion, through occupation and beyond. Of course the remit must be manageable in scale. We cannot have an inquiry that drags on for years at growing cost and irritation to the taxpayer. But it must also be flexible. Both the Butler and Hutton inquiries were far too narrowly prescribed to get at the truth. As such, they totally failed to satisfy the public need to hold Government and Parliament to account.

I would therefore ask that, despite these press reports, you confirm that it is the Government's intention to consult as soon as possible with opposition parties on the type, remit and membership of the inquiry. In our view the cross-party Public Administration Select Committee should also be consulted. The Iraq war has exacted a terrible cost - in lives, in money and in security, but also in trust. Britain's international reputation and that of Parliament in the eyes of its people have borne a terrible blow.

This inquiry may therefore be the most important in our nation's history. The public mood should not to be misread once again by the Prime Minister, Government or Parliament. The Iraq war was endorsed by Parliament - though not by all its Members, and not armed with all the facts - it is therefore only with full backing across Parliament that this inquiry can hope to win back public confidence.

Yours,

Edward Davey MP
Liberal Democrat Shadow Foreign Secretary

cc William Hague, Conservative Shadow Foreign Secretary

The figures, given in a Parliamentary answer, show that the number of carers looking after under-8s has declined by nearly 10,000 over six years.

The Liberal Democrat Children and Families Spokesperson, said: "The Government's bureaucratic approach to pre-school care is causing childminders to turn away from the profession."

"As we approach the summer holidays, it is going to be a real struggle for hard-pressed parents to find good, affordable childcare."

Annette Brooke went on to say; "Childcare costs have spiraled over recent years and there is a risk that the drop in the number of childminders is going to drive up costs even further. We already have the farcical situation where some parents find they are better off giving up work rather than forking out for expensive childcare."

"Ministers must rethink the current system and find the right balance between ensuring that children are cared for in a suitable environment, without placing unreasonable demands on childminders."

Annette concluded; "The Government must provide more support to families by expanding free pre-school childcare to 20 hours a week for all children from 18 months."

Nick Clegg visited Bristol to congratulate council leader Barbara Janke and the local Liberal Democrats

European elections results from across the UK.

Fiona Hall has been re-elected as an MEP for North East England.

Andrew Duff has been re-elected as an MEP for the East of England.

Diana Wallis has been re-elected as an MEP for Yorkshire and the Humber.

Sarah Ludford has been re-elected as an MEP for London.

Bill Newton Dunn has been re-elected as an MEP for the East Midlands. With the number of MEPs in the region reducing by one, this was a gain from UKIP.

Graham Watson has been re-elected as an MEP for the South West of England.

Sharon Bowles has been re-elected as an MEP for the South East of England and is joined by new MEP Catherine Bearder.

Liz Lynne has been re-elected as an MEP for the West Midlands.

Chris Davies has been re-elected as an MEP for the North West of England.

George Lyon has been elected as an MEP for Scotland.

Local elections

The Liberal Democrats have taken control of Bristol City Council, picking up four seats. Labour fell into third place on the Council, losing eight seats.

We have taken five seats from Labour in the Burnley area of Lancashire County Council, and three seats from the Conservatives and one from Labour on Essex County Council.

Liberal Democrat candidates have defeated the Conservative group leader on Cumbria County Council and the Labour council leader on Nottinghamshire County Council. We cut the majority of the Labour leader on Derbyshire County Council from around 1,000 to 76.

The Liberal Democrats are the largest group on the new unitary Bedford Council and made big gains from Labour in Ashfield.

While Labour and the Conservatives saw their number of seats on Surrey County Council fall, the Liberal Democrats were the only of the main parties to increase their number of seats. We also made net gains - from the Conservatives and Labour - in many other counties, including Cumbria, Dorset, East Sussex, Hertfordshire, the Isle of Wight, Kent, Lancashire, Leicestershire, Staffordshire, Warwickshire, West Sussex and Worcestershire.

The BBC's projected national vote share is Conservatives 38%, Liberal Democrats 28%, Labour 23% - the Liberal Democrats are the only of the three to increase their projected share from last year's local elections.

Responding to the early results and the Cabinet reshuffle, Nick Clegg described the government as "finished" and called for a general election. He said, "The Labour government has run out of road, it's finished. We need something new, different, fresh."

"This government can no longer govern. It is dysfunctional, it is in meltdown. We need a general election."

Nick went on to applaud the Liberal Democrats in Bristol, saying that now "the Liberal Democrats run the vast majority of the big cities."

You can watch Nick's response on the Telegraph website.

We also covered the results on Twitter - follow our account, @libdems.