The coalition’s bitter rift over the economy deepened on Sunday when David Cameron accused the Liberal Democrats of being “all over the place” on the economy and Nick Clegg countered by saying the Tories were trying to kid the electorate on the scale of their plans to cut the deficit.
Writing to Tory backbenchers, the prime minister claimed the choice for the electorate in the wake of the autumn statement was between competence and chaos. Cameron wrote: “The Liberal Democrats are all over the place, unable to decide whether they want to stick to the plan or veer off it. And they – like Ukip – would be prepared to prop up a failing Labour government.”
In sparring that underlines the extent to which the two coalition parties are diverging as the election draws near, the deputy prime minister accused the Tories of making unfunded tax cuts.
“It is impossible to balance the books, remorselessly shrink the state, deliver unfunded tax cuts and protect the public services that people treasure – such as supporting the police, the NHS, schools and colleges,” he said on BBC1’s Andrew Marr Show.
He said the Tories were “kidding themselves, or kidding the public, if they think they can do that. It just does not add up”.
The two coalition parties agreed they needed to “get rid of the last bit of the so-called structural deficit in 2017 and 2018, but thereafter there are some big differences”, Clegg said.
He and the Tories are now publicly at odds over spending plans after 2017-18 and whether tax rises are needed to clear the deficit, as the Lib Dems believe.
Clegg said he supported the plan set out in Wednesday’s autumn statement to get rid of the non-cyclical current deficit by 2017-18, but said state spending thereafter should rise in line with GDP. The autumn statement, by contrast, was based on projections that total government expenditure will be flat in real terms in the two years after 2017-18, and so not rise in line with overall economic growth. The Lib Dems also want capital spending to rise in the next parliament.
On Sunday night Danny Alexander waded into the row to accuse the Tories of pandering to Ukip in a pre-election panic.
The chief secretary to the Treasury claimed the Tories would “inflict unnecessary pain” on the country because they were ideologically committed to shrinking the state and had a policy of “austerity forever”.
In an article for the Daily Telegraph, he wrote: “It is sad to see the Conservatives move away from the sensible, balanced approach of the coalition, to a more doctrinaire policy that would inflict unnecessary pain on the people of Britain.
“Who’d have thought that of the two parties that formed the coalition, it would be the Tories who would be blown off course?
“A mix of unfunded tax promises, harsh spending plans and pandering to Ukip may be born of pre-election panic, but it is not economically credible.”
The Conservatives have been forced to counter analyses by the Treasury’s watchdog, the Office for Budget Responsibility (OBR), and by the Institute of Fiscal Studies thinktank suggesting that by 2019-20 spending will fall to its lowest level as a percentage of GDP for 80 years. Ministers have also been accused of misleading the public by claiming more than half the cuts programme has been implemented.
The Conservatives moved on Sunday to undo any political damage about the scale of its cuts, denying they had any target to achieve a large budget surplus by 2019-20 and insisting public spending would only fall to the level of the Labour government in 2002.
The former Labour cabinet minister Lord Mandelson will warn on Monday night that the government may be going too far in its cuts programme, saying it will cost the Tories centre-ground support.
Mandelson, often a critic of Labour’s deficit stance, will say: “The public do not want an axe taken to public services and state spending. They know the public finances need rebalancing and put on a sound footing, but the Tories are pursuing this too eagerly, with too much zeal and ideological relish. This is not where mainstream voters are.”
He is due to make his remarks on Monday, at the launch of a new Labour pamphlet on policies for the 21st century, in which he will argue that mainstream voters want policies that “are aspirational and not motivated by envy or resentment of those who are better off”.
On the BBC’s Sunday Politics programme, David Gauke, the Treasury financial secretary, insisted the cuts required were achievable once efficiency savings and welfare cuts were included. He added the Conservative party was “not committed to the £23bn surplus” in 2019-20.
In the autumn statement last week the chancellor, George Osborne, announced the OBR economic predictions that suggested Britain would have a surplus of £4bn in 2018-19, increasing to £23bn the following year.
Gauke said his party was not bound by the OBR prediction. He said: “We’ve made very clear we are committed to a surplus. At the moment the OBR predicts that we will have a surplus of £23bn, but we’re not making a commitment to the British people, ‘that’s what the number will be in 2019’.”
(the guardian)
