Nick Clegg today launched the Liberal Democrat’s election manifesto pledging a system of “fairer taxes”.

He urged the electorate to break away from the traditional Labour-Conservative divide on polling day, arguing it was “time for something different” and “real change”.

“We’ve had 65 years of Labour and the Conservatives: the same parties taking turns and making the same mistakes, letting you down,” he said.

“They have taught people to expect little from politics, and get less. It is time for something different. It is time for something better.

“Only Liberal Democrats have the big ideas for fundamental, structural changes in the way our country works to make it fair.”

The centre-piece of the 103-page document was a pledge to raise the personal allowance on income tax from £6,035 to £10,000 – giving most people a tax cut of £700.

Joined by the party’s Treasury spokesman Vince Cable on stage at the launch in the City, he said the cut would be paid for by closing tax loopholes that “unfairly benefit the wealthy and polluters”.

However, he admitted the party could not rule out tax rises after the election to reduce the record deficit.

“Over and above our planned new levy on the profits of banks, we will seek to eliminate the deficit through spending cuts. If, in order to protect fairness, sufficient cuts could not be found, tax rises would be a last resort,” he said.

Other pledges included a fairer and greener economy, and cleaning up politics by offering people the power to sack corrupt MPs, reform of the voting system, an elected House of Lords and a Freedom Bill to restore civil liberties.

Mr Clegg promised a shake-up of the education system, cutting class sizes and a £2.5 billion investment to help struggling pupils.

He also pledged to break up the largest banks – separating their investment and high street operations.

And he proposed all bank bonuses above £2,500 be paid in shares – with a ban on all bonuses at board level.

Other pledges included a guarantees on the state pension, a limit on political donations, and more pay for the armed forces.

By London reporter Sunita Patel