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Nick Clegg was today forced to defend backing a rise in VAT as he faced a growing backlash from Liberal Democrats and saw his party fall in the polls.
Mike Hancock became the latest Lib-Dem backbencher to threaten to refuse to vote for the Budget despite Deputy Prime Minister Mr Clegg and Chancellor George Osborne's attempts to portray it as progressive — hitting the rich more than the poor.
The respected Institute for Fiscal Studies has challenged this claim and Portsmouth South MP Mr Hancock told the Standard that he had “very strong reservations” about the coalition's financial plan.
“I might not vote for it,” he said, adding: “Poorer people in society had started to feel slightly better off. I think some of them will feel in a year from now that things for them have gone backwards.” Colchester Lib-Dem MP Bob Russell has said he may vote against the Budget while Tim Farron MP, who stood for the party's deputy leadership, has branded the Lib-Con coalition “ideologically a poor fit”.
Many Lib-Dems fear that the less-well-off will suffer more from Budget measures to deal with the financial crises inherited from Labour and believe the City should have to pay billions more to rebalance the nation's books.
Baroness Tonge, former Liberal Democrat MP for Richmond Park, said: “The banker's levy is pathetic and I'm incensed by capital gains tax which should have been much higher.
“The rich have been let off yet again by the Tories.”
Mr Clegg denied the cuts would hit the poorest hardest. Grilled on BBC Radio 4's Today programme, he said: “The top 10 per cent pay eight times more in cash terms than the bottom 10 per cent.” Future budgets would include “very exceptional measures” to ensure fairness. Stressing he is a Liberal politician to his “fingertips”, he added: “It really is simply not right to airbrush out of the record that we have taken measures this week which will take 900,000 people on the lowest incomes out of paying income tax entirely. One million low-income families will benefit from a huge increase in child tax credits.”
But the latest poll by YouGov for The Sun put the Lib-Dems on 17 per cent, down from 23 per cent at the election, with the Tories on 42 per cent and Labour on 34.
Business Secretary Vince Cable also sought to defend raising VAT to 20 per cent despite the Lib-Dems attacking in the election campaign the Tories' “secret VAT bombshell”.
He stressed that the truth about VAT being a regressive tax was “more nuanced” than portrayed and added in an article for the Liberal Democrat Voice: “VAT is far less damaging for growth than most other taxes.”
Reader views (10)
It is grossly unfair to put tax up, increase VAT, introduce new taxes, etc etc, which are a burden on the tax payers, because of Governmental incompetence at handling our money! The common man cannot absorb this behaviour and the Government should make cuts somewhere else, like kicking out people who should not be in the UK in the first place i.e., free loaders. People who do not want to work should have all benefits cut etc etc.
- WB ex pat, outside UK (thank goodness), 25/06/2010 10:03
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Clegg has just grown up as he has realised that he has to be involved with providing solutions and the situation is far worse than he thought when he was opposing VAT increases.
Labour says it would have made cuts but does anyone know what they would have cut?
- Stephen C, London, 24/06/2010 17:59
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For this arrangement to work,there has to be give and take on both sides,I think these two are doing well,considering what they took over.
- Davey_buoy, Chertsey, 24/06/2010 14:53
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You are doing well Mr Clegg. Just 'tough it out' and you will show the spendthrift critics how sensible housekeeping will make us all better off.
- John, Highgate, 24/06/2010 14:35
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This is what a taste of power does to you…Clegg loves his Deputy PM role so much, he willing to sacrifice his Liberal beliefs. The Tories are using the Lib Dems & love to exploit the conditions of our black hole to make us (not the Rich) pay for this. Their Psychologist’s bills must be sky high because the build up to the budget was just too mind blowing, just like the haste in spending cuts.
- James, London, 24/06/2010 13:18
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The VAT increase was just the Tories, (Non European Party) realigning VAT across Europe now we all pay the same, (Germany 19% Oh!)
What's more scary is they want us to work until we are 70! before you get a state pension, the only thing this will achieve is more old age pensioners on the dole. Same old Tories.....
- A Worker, London., 24/06/2010 13:12
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It seems the "expenses scandal" has now been replaced with the even bigger scandal of "jobs for the boys" where you say anything before an election and then do the opposite after - Its no wonder that Clegg turns out to be such a good Tory!!!
I hope all the millions who vote Lib Dem are proud of what they have got as Gordon Brown said "If you want a Labour government you have to vote Labour!" Anthing else and you are voting TORY!!
Wonder if 65 year olds will have to undergo health checks to see what work they can do?
- Melvyn Windebank, Canvey Island , Essex, 24/06/2010 11:54
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Clegg is right about the need to cut public spending
not to do so will result in the IMF being called in
with bigger tax increases to follow,welfare benefits and Pension payments slashed.
Better to take the medicine now than Cod Liver oil
later.....argh!
- Mike Adams, Taunton, 24/06/2010 11:53
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It is also morally right to follow through with the promises made to the millions who voted for you, but selling your soul for a seat on the front bench was worth the betrayal wasn't it Nick?
If you get one seat at the next election I shall be amazed.
The sight of your smug face as you simper and snuggle up to Cameron makes my stomach heave.
- Barry, Welwyn England, 24/06/2010 11:28
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What would these rich kid politicians know about the implications of slashing spending, its slashing spending in the right area thats the skilfull bit, try looking at the fat cats in westminster, whitehall and the high cost and high living quangoes.
- stuart, chesterfield,derbyshire, 24/06/2010 10:33
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