Media playback is unsupported on your device Media caption Vince Cable set out his three priorities: stability, stimulus and solidarity

Business Secretary Vince Cable has told the Liberal Democrat conference that the economic challenges facing the UK are the "equivalent of war".

In a bleak assessment of the future, he said the era of ever-rising living standards had ended and people were just worrying about "how to survive".

It is the latest in a series of warnings from senior Lib Dem figures about the state of the economy.

In his speech, Mr Cable also called for more controls over executive pay.

Mr Cable told delegates that he believed that public "was tired of being lied to" and he would not pretend that there were not "difficult times ahead" for the economy.

'Survival'

"Britain's post-war pattern of ever-rising living standards has been broken by the financial collapse," he said. "People are not thinking about 10 years ahead when they are worrying abut how to survive the next 10 days to payday."

Analysis "We now face a crisis that is the economic equivalent of war." We probably haven't heard as dramatic a statement from a government minister about the state of the economy. Vince Cable has left us in no doubt how he sees it - if there are "sunny uplands" then they are way off on the horizon. Though he didn't refer to it, this morning there was more bad news from the Financial Times, which reckons there's a further £12bn black hole in the UK budget. It rather puts into context the big announcement of the day: of the new jobs and factory at Jaguar Land Rover. They are, of course, something to celebrate, but Mr Cable's speech made clear how gloomy the outlook really is. Full coverage: Lib Dem conference 2011 Commentators' verdicts on Cable's speech

He compared the challenges facing the current Conservative-Lib Dem administration to those confronted by Winston Churchill's coalition government during World War Two, saying the severity of the situation meant it was right for two parties to work together.

"Now you could say, that was war, that is different. Yes it is different. But we now face a crisis that is the economic equivalent of war.

"This is not a time for business as usual or politics as usual".

Mr Cable warned the UK could not blame its current flagging growth on the turmoil in the eurozone or a weak US economy as many of its problems were "home-grown".

'No Father Christmas'

Warning against "Father Christmas" tax cuts or giveaways, he said targeted investment in infrastructure, support for manufacturing and a fundamental restructuring of the banking system were important steps to "rebuilding our broken economy from the rubble".

The BBC's Chief Political Correspondent Norman Smith said senior Lib Dems had struck a relentlessly downbeat tone about the economy in recent days.

Chief Secretary to the Treasury Danny Alexander told the BBC that the world economy was in a "very serious situation" and the country faces a "long, hard road back to recovery".

Lib Dem leader Nick Clegg has said the economic model of recent decades - focused on the City and the south-east of England - had collapsed and it would take a generation to build something new.

But they have all insisted that, while more can be done to stimulate economic activity, the coalition must stick by its target of eliminating the deficit over the next four years.

Mr Cable told conference the public would "only accept continuing austerity if it is seen to be fair".

"Yet there is currently a great sense of grievance that workers and pensioners are paying the penalty for a crisis they did not create. I want a real sense of solidarity."

'Disparities of wealth'

He said the Liberal Democrats must continue to press for a reduction in the tax burden on low and middle earners - and ensure the wealthiest continued to pay the most.

On curbing top executives' pay they are only launching a consultation into how to have greater transparency - a policy the Conservatives advocated before the last election Nick Robinson: Rhetoric hides coalition unity

He did not mention the 50p top rate of tax - something other Lib Dems have vowed must remain in place - but did signal his continued commitment to some form of "mansion tax" on large properties - an idea which was widely criticised when he proposed it in opposition.

"What Liberal Democrats should focus on are the vast disparities in wealth - much of it in inflated property and land prices artificially generated by the boom of the last decade," he said.

"When some critics attack our party policy of a tax on properties over £2 million by saying it is an attack on ordinary middle class owners, you wonder what part of the solar system they live in."

He also insisted the Lib Dems in government had made "real achievements", such as on apprenticeships, the green investment bank and Post Office reform.

'Responsible capitalism'

Stressing the theme of "responsible capitalism", Mr Cable also vowed to tackle "the escalation of executive pay" which he claimed was not linked to share values.

Mr Cable has published a discussion paper aimed at curbing multi-million pound pay packages. Downing Street said there would now be "further discussions" on its contents.

Saying he regretted not doing more to curb bank bonuses over the past year, Mr Cable proposed requiring companies to set out the criteria used to determine pay and perks and putting employee representatives on remuneration committees.

"Surely pay should be transparent; not hidden from shareholders, and the public. I want to call time on pay outs for failure."

Labour said Mr Cable should be judged by his actions not his words.

"Vince Cable says his biggest regret from the last year is not tackling bank bonuses but it should be his complete failure to support business, create jobs, help small and medium enterprises to access finance and to build on the growth he inherited from Labour," said shadow business secretary John Denham.

"The recovery has been choked off and yet..he still relentlessly supports (chancellor) George Osborne's reckless policy of cutting too far and too fast."