Nick Clegg and fellow senior Liberal Democrats secretly planned to back drastic slashing of the deficit before they struck a coalition deal with the Conservatives, despite a pledge to the electorate that they wanted to continue spending, it was claimed last night.
Ed Miliband, emerging as the main challenger to his brother for the Labour leadership, stoked Lib Dem discomfort over the extent of swingeing public spending cuts on the eve of the toughest Budget for decades.
Chancellor George Osborne is preparing to unveil nearly £30bn of tax rises and public spending cuts in his debut Budget on Tuesday, with benefits for middle classes and VAT expected to take hits.
A ComRes poll for The Independent on Sunday reveals that the public is braced for hard times this week, with the majority backing cuts to child benefit for middle class families and claiming they would be prepared to pay more in income tax rather than see public services cut.
With divisions over the deficit wider than ever between the coalition and Labour opposition, Mr Miliband branded Mr Clegg – who has faced acute embarrassment over £100m of cuts near his Sheffield constituency – a "crypto-Tory".
Mr Miliband was on the Labour negotiating team that took part in private talks with Lib Dem figures to try to reach a post-election coalition deal. In an interview with The IoS, Mr Miliband attacked both Tories and Lib Dems as "deficit headbangers", but said Chris Huhne and David Laws, who later joined the coalition Cabinet, were "macho" and "cavalier" about cutting the deficit, declaring in the secret talks that "it needs to be now and it needs to be faster".
The claim undermines the Lib Dems' election pledge to support Labour's commitment to continue spending to boost economic growth, rather than take an axe to public spending this year. It also casts doubt on the impression that Lib Dems are reluctant partners to the Tories in slashing the deficit.
Mr Miliband said: "One of the biggest sticking points [in Labour/Lib Dem talks] was around their, frankly, completely macho position on the question of the deficit, saying it needs to be now and it needs to be faster. They were completely cavalier about that.
"[Clegg] has totally sold out to the Tories – he's revealed himself to be a crypto-Tory. This is exactly what happened in the 1980s under Mrs Thatcher, but this time you have a Liberal Democrat party and a Liberal Democrat leadership which is frankly in cahoots with this agenda.
"They will have sold their own party down the river just for the sake of power and I think people will feel very betrayed by that."
David Cameron and Mr Osborne have tried to bind Mr Clegg and other Lib Dem ministers to the cuts agenda, to the outrage of Lib Dem activists and some MPs. Deputy Prime Minister Mr Clegg has been derided in Sheffield after the Government withdrew an £80m loan to the local engineering firm Forgemasters, as well as a further £20m in spending on the city.
In an interview with The Times yesterday, Mr Cameron said this week's Budget would be when "the rubber really hits the road".
In further evidence that the Tories are attempting to defuse anger over the Budget, the Prime Minister and Mr Clegg will appear in a joint TV interview the day after Mr Osborne's statement to defend the cuts.
Many are expecting the Budget to include a rise in VAT from 17.5 per cent but there is speculation it will not be as steep as predicted, to 20 per cent, but may rise only to 19 per cent.
Cuts to child tax credits for middle earners are also on the agenda. Mr Osborne has been under pressure from right-wing think tanks to go further and means-test child benefit. There could be some changes to child benefit and other benefits under a huge shake-up of welfare payments.
The ComRes poll for the IoS suggests ending the universality of child benefit would not be widely opposed. Some 53 per cent agree that the benefit "should be withdrawn from better-off families", with 42 per cent opposed.
A total of 48 per cent say they would be prepared to pay more income tax than see public services cut, against 45 per cent who would not. But the public is opposed to cuts to pensioners' benefits, with 58 per cent disagreeing with the statement that "the winter fuel allowance should be withdrawn from better-off elderly people".
Mr Cameron, who attends his first G20 summit as PM next weekend, is yet to convince all world leaders that the drastic deficit-cutting strategy is the correct one. In a letter to fellow G20 leaders ahead of the talks in Toronto, President Barack Obama expressed concern about European austerity measures. He warned that governments must learn from the "consequential mistakes of the past when stimulus was too quickly withdrawn and resulted in renewed economic hardships and recession".
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