Leader Nick Clegg under fire from Lib Dems over his backing for Tory cuts after next general election

Pressure group warns that the party must not be locked into such 'economic illiteracy'

Nick Clegg is facing a grassroots revolt by Liberal Democrat members who claim he has signed up to another three years of deep spending cuts after the 2015 general election.

The Social Liberal Forum, the main pressure group on the left of the Lib Dems, has warned that the party will stand for nothing if it commits to more “Tory cuts” at the election and said it must not be locked into such “economic illiteracy.” It accused Mr Clegg of tearing up an agreement  between the leadership and membership on economic policy.

The forum is angry that the autumn statement delivered by George Osborne last week revealed that both coalition parties agreed that even after the annual budget deficit has been wiped out, any surplus in good years should be used to cut the remaining national debt.

The forum is close to Vince Cable, the Business Secretary, who is understood to share its concerns. He does not want the Lib Dems to commit to cuts beyond the 2015-16 financial year, which begins a month before the May 2015 general election.

In a warning shot aimed at the Treasury, Mr Cable said that the party would “not be locked into a Tory agenda.” He added: “Liberal Democrats have a different approach to tax and spend, in particular with an emphasis on fairness in the way the tax system operates, and our achievements in lifting low earners out of tax. Ultimately the electorate has got to decide what the outcome of the next election is, but we will go into it as a distinct party with a distinct agenda.” 

Mr Clegg has backed the idea of MPs voting on a “charter for budget responsibility” covering the post-election period that the Chancellor will publish in a year's time. The move is widely seen as a trap for Labour but Lib Dem activists fear their party has been drawn into it.

Prateek Buch, the forum's director, said  Lib Dem members should “have a say before being chained to this economic illiteracy.” He added: “Osborne plans to legislate to shrink the state, balancing the books without balancing the economy. As an independent party with our own economic vision, the Lib Dems simply cannot sign up. Lib Dems only recently agreed to prioritise investment in people, business and infrastructure over setting arbitrary targets for balanced budgets before a recovery in living standards takes hold.”

Writing on The Independent's website, he described the Osborne plan as “a political timebomb” that could have “utterly devastating consequences” for public spending. He warned that the Lib Dems would be left without “a distinctive vision on the economy” if they signed up to it.

The forum is worried that the Chancellor intends to reduce the five-year period of his “fiscal mandate”-possibly from five to three years. It fears  that this could remove the Government's ability to “borrow to invest.”

Clegg allies insist that backing the charter does not mean the party is signing up to “Osbornomics.” For example, they say, the Lib Dems will fight the election promising a mansion tax on homes worth more than £2m to raise about £2bn a year.

A senior party source said: “The Lib Dems are signed up to the Coalition Government's fiscal consolidation programme, which finishes in 2017-18. Full spending plans have been agreed up to end of this Parliament (2015-16) but no specific plans have or will be agreed beyond that.”

He added: “It will be for both parties to set out at the 2015 election how they will complete the balancing of the books. The Lib Dems and the Conservatives will almost certainly have very different views on the mixture of tax rises and spending cuts required. Both parties will set out an independent fiscal policy at the next election. But the Lib Dems have also been clear that even when the books have been balanced, we must continue to get our national debt down. To not do so is unfair to our children and grandchildren and will not help us build a stronger economy in a fairer society.”

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Barnardo's: Corporate Audit and Inspection – Retail Intern (Leeds)

Unpaid - £4 lunch allowance plus travel to and from work: Barnardo's: Purpose ...

Recruitment Genius: Content Writer - Global Financial Services

£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Web Developer - PHP

£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Customer Service / Receptionist

£15000 - £24000 per annum: Recruitment Genius: This is an exciting opportunity...

Day In a Page

The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory
Ashes 2015: Alastair Cook not the only one to be caught in The Oval mindwarp

Cook not the only one to be caught in The Oval mindwarp

Aussie skipper Michael Clarke was lured into believing that what we witnessed at Edgbaston and Trent Bridge would continue in London, says Kevin Garside
Can Rafael Benitez get the best out of Gareth Bale at Real Madrid?

Can Benitez get the best out of Bale?

Back at the club he watched as a boy, the pressure is on Benitez to find a winning blend from Real's multiple talents. As La Liga begins, Pete Jenson asks if it will be enough to stop Barcelona
Athletics World Championships 2015: Beijing witnesses new stage in the Jessica Ennis-Hill and Katarina Johnson-Thompson heptathlon rivalry

Beijing witnesses new stage in the Jess and Kat rivalry

The last time the two British heptathletes competed, Ennis-Hill was on the way to Olympic gold and Johnson-Thompson was just a promising teenager. But a lot has happened in the following three years
Jeremy Corbyn: Joining a shrewd operator desperate for power as he visits the North East

Jeremy Corbyn interview: A shrewd operator desperate for power

His radical anti-austerity agenda has caught the imagination of the left and politically disaffected and set a staid Labour leadership election alight
Isis executes Palmyra antiquities chief: Defender of ancient city's past was killed for protecting its future

Isis executes Palmyra antiquities chief

Robert Fisk on the defender of the ancient city's past who was killed for protecting its future