THE Liberal Democrats will add extra bands to council tax to raise money from the rich and cut the deficit fairly, Danny Alexander has told activists in Glasgow.

The Chief Secretary to the Treasury said Liberal Democrat participation in the next government would mean an extra fiscal rule requiring the wealthiest to bear the heaviest burden as spending falls and taxes rise.

Mr Alexander won a standing ovation at conference after insisting only the LibDems could stop Labour borrowing too much and the Tories from cutting too deep.

"We will introduce a new levy on the highest-value properties," he said. "New bands on top of council tax to end the outrage that a £50 million property can currently pay the same as a half million pound home. But the entire deficit cannot be removed through taxes on the wealthy - far from it. Departmental spending will see further reductions, and we will have to keep social security bills under control."

Mr Alexander also warned that David Cameron's pledge for a referendum on EU membership is one of the biggest risks facing the British economy.

He accused Foreign Secretary Philip Hammond of being "bad for Britain", for suggesting that he may vote to leave the EU in a possible referendum.

However, Mr Alexander appeared to suggest the LibDems would be willing to discuss a possible EU vote in any coalition negotiations after next May's General Election.

Mr Alexander made his comments during a question-and-answers session.

Asked what he thought were the biggest risks to the economy, he said: "The idea that Britain may leave the EU is looming very, very large for an awful lot of businesses. I know because I talk to people who are thinking about investing in the UK all the time, and I try to persuade them to come and invest here."

But, he added, "for a lot of those people, they are saying, 'Well, it is great what you have done and we would like to come and invest in the UK but this EU risk is an issue'.

"It is investors who have said, 'Well, maybe we will just put a little more money in France or Germany or other European counties rather than the United Kingdom, because of that'. That is a real problem."

He went on: "To have a Foreign Secretary who is willing to say that he might vote to leave the European Union I think is utterly extraordinary and very bad for Britain."