Brown-Darling 'risks stability'

In a speech to the CBI conference, Mr Clegg is expected to claim that Prime Minister Gordon Brown and Chancellor Alistair Darling have "got it wrong" on a series of key decisions affecting the business world.

And he will call for an independent inquiry into the financial industry's tripartite regulatory system - involving the Bank of England, the Financial Services Authority and the Treasury - which was put in place by Mr Brown as Chancellor and has come under criticism for its failure to avert the crisis at Northern Rock.

He will cite the Northern Rock credit crunch, the massive growth in personal debt and the agreement of new extradition rules which saw the so-called NatWest Three sent to the US to be tried on charges relating to the collapse of Enron as key examples of policy failings which have impacted negatively on business.

Mr Clegg will say: "As we saw with the NatWest Three, the massive credit expansion and Northern Rock, on too many issues this Government is just getting it wrong."

And he will warn: "On too many measures Britain is struggling to meet the competitive challenges from not only traditional competitors in Western Europe and the United States but also emerging economies like India, China and Brazil."

If Britain is not to be buffeted by events like the credit crunch sparked by the crisis in the US sub-prime mortgage market, the Government must focus on the fundamentals of economic success - a skilled workforce, strong competition policies, regulation that is effective and a proportionate and fair tax system - Mr Clegg will say.

He will call for more spending on reading and writing in schools; the completion of the EU single market; and greater efforts to achieve a successful conclusion to the current round of talks on world trade.