Sir Ed has been under pressure this week to set out bolder policies, with his party languishing in fourth or fifth place in national opinion polls.
He began his speech with a sombre and punchy attack on Reform UK leader Nigel Farage.
He stopped short of calling Reform fascists, but drew a link between the fascists in Britain in the 1930s with what he called “thugs, in black shirts and balaclavas” in reference to the protests in Dover and Portsmouth in recent weeks.
“This is a far-right movement that is given oxygen, and heat, and fuel by politicians and parties who claim to be serious contenders to lead our country,” said the Lib Dem leader.
His solution is “community politics” that he argues is the hallmark of the Lib Dems.
“It will take more than a manifesto. It will take a movement, rooted in decency, fairness and community. British values. Liberal values,” he said.
Repositioning the Lib Dems as a tax cutting party is aimed at appealing to voters they are targeting in traditional Tory heartlands.
And Sir Ed used his speech to attack Tory leader Kemi Badenoch over her policy shifts on climate change and human rights law.
“Millions of decent, moderate Conservative voters are getting her message, and they’re turning away – increasingly, to us,” he told the audience in Brighton.
He took a swipe at Prime Minister Andy Burnham for failing to commit to rejoining the EU single market, something the Lib Dems say they would do in their first year in government.
Lib Dem sources refused to say whether the income tax plan would be a condition of joining a coalition government with Labour or another party, saying the party’s aim was to get as many MPs as possible.
Sir Ed has ruled out a coalition with Reform UK, and dismissed suggestions he could do a deal with the Conservatives, as his party did in 2010.
The Lib Dem leader also addressed the potential threat posed by AI in his speech, saying that “handled badly, it concentrates more power in fewer hands than at any point in human history.”
He said Burnham’s AI partnership with US president Donald Trump “doesn’t come close to meeting the scale of this threat” and called for “a global treaty to press pause on super-intelligent AI now”.
He proposed “a new International AI Safety Agency – like we have for nuclear – to stop anyone from developing this technology recklessly.”
