In Depth

Two-faced Danny: top Lib Dem puts the knife into Osborne

Yesterday, it was ‘a Lib Dem Budget’… today he’s pushing a ‘fairer way’ to deal with UK deficit

The Mole

Danny Alexander, the Lib Dem Chief Secretary to the Treasury, appears two-faced today as he seeks to distance himself from yesterday’s Budget which (if you believe the Daily Mirror) will lead to a “bloodbath” of spending cuts on schools, the police, defence and the NHS.

Last night on the BBC’s News at Ten, Alexander, who represented the Lib Dems in putting together George Osborne’s package, hailed it as “a Lib Dem Budget”.

“This is a very Liberal Democrat Budget,” he said. “It was a Budget that raises taxes on tax avoiders and the best off and uses it to fund a bigger income tax cut for millions of working people. [The tax threshold is to rise to £10,800 and then £11,000.] This is absolutely a package we sign up to.”

But this morning, amid warnings that spending cuts will still be extraordinarily severe despite the Chancellor’s agreement to relax austerity measures towards the end of the next parliament,  Alexander went on Radio 4’s Today programme to disown the consequences of the Budget and put the knife into Osborne. 

“We [the Lib Dems] can deal with the deficit... but we can do so in a fairer way by allowing a substantial proportion of that to be carried out by tax measures to ensure the better off in society carry a substantial proportion of that… There is a big difference between the Liberal Democrats and the Conservatives about how you do that.”

Later today, Alexander will set out the alternative Lib Dem approach to cutting the deficit. They want higher tax increases on the rich - such as the mansion tax - and higher taxes on the banks than Osborne signed up to. They would also allow more borrowing to reduce the cuts in public investment in roads and railways.

The row is all about how painful the upcoming spending cuts are going to be. 

Osborne announced yesterday he had reduced his forecast for a fiscal surplus by 2019-20 from £23bn to £7bn, in the hope of shooting Labour’s fox on public spending cuts.

But the Office for Budget Responsibility (OBR) said Britain still faces spending cuts in 2016-17 and 2017-18 that will require “a much sharper squeeze on real spending… than anything seen over the past five years”. The OBR said the Budget “showed a rollercoaster profile for implied public service spending through the next Parliament”.

Treasury sources are furious with the OBR, insisting that it is wrong because it has not taken account of the fact that the figures have changed because of Osborne's decision to easing his target for a surplus.

Ed Balls, the shadow chancellor, seized on the OBR report this morning, telling the Today programme that the Tory-Lib Dem coalition was “nasty and mean” to those relying on public services. “I will reverse deeper cuts. You have a Chancellor who wants deeper cuts in the next three years than we had in the last five years.” 

So the election campaign now boils down to a simple question: who do you believe? 

The Labour-supporting Daily Mirror warns this morning that the necessary cuts in public services will lead to a “bloodbath”. 

John Rentoul in The Independent attacks Ed Miliband for failing to anticipate Osborne’s move to relax austerity measures, thus rowing back from taking public spending to the lowest level since the 1930s: “Labour cannot accuse Osborne any longer of wanting children to go to school without shoes in the sepia-tinted years before the NHS.” 

Paul Johnson of the respected Institute for Fiscal Studies reckons the real difference between Labour and the Tories is about £25bn in cuts in public spending. You pays your money and you takes your choice.

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