Danny Alexander has sparked a row with Liberal Democrat activists by endorsing Chancellor George Osborne’s plans for more spending cuts well beyond next year’s election.
The Social Liberal Forum (SLF), the main pressure group on the party’s Left, has accused the Treasury Chief Secretary of straying beyond official Lib Dem policy by setting out proposals to maintain the squeeze on spending until the 2020-21 financial year. The group fears this would mean billions of pounds of further cuts.
It is believed that Vince Cable, the Business Secretary, and David Laws, the schools minister who is in charge of the Lib Dem election manifesto, have also questioned whether Mr Alexander’s approach is in line with party policy.
Mr Alexander’s row with the grassroots group follows an attack by him on the Labour spending plans announced by Ed Balls, the shadow Chancellor, 10 days ago.
The treasury minister claimed that Labour’s “borrowing bombshell” would mean £166bn more borrowing by 2020-21 than under the “Coalition plan” set out in Mr Osborne’s autumn statement in December. However, the Chancellor’s statement covered only the period to 2018-19 and the Lib Dems have signed up to detailed joint spending plans with the Tories for only one financial year – 2015-16, which starts a month before next year’s election. Prateek Buch, co-chair of the SLF, said yesterday: “Cuts on the scale planned by Osborne just cannot be delivered. So why should Lib Dems endorse the Chancellor’s straitjacket?
“It is beyond me why Danny would sign up to what appears to be joint Lib Dem/Tory spending plans going beyond the end of the next parliament, when no such figures have been agreed by his own party.
“It is unhelpful to pre-empt the party’s manifesto process in this way. Besides, the plans take no account of the need to invest, or what will happen to GDP. What happened to differentiating ourselves from the Tories?”
Mr Alexander has formed a close working relationship with Mr Osborne since moving to the Treasury shortly after the 2010 election. Tory ministers regard the Treasury as the most “pro-coalition” department in Whitehall. But some Lib Dems privately complain that Mr Alexander has “gone native” and is too keen to wield the axe on public spending.
Allies of the Treasury Chief Secretary dismissed the criticism and said Lib Dem policy was not changed by his statement on Labour’s plans.
One said: “These were figures drawn up by independent officials at the Treasury. They are not Conservative numbers or Lib Dem numbers. If he was setting out long-term spending plans, he would not do it in a press release attacking Ed Balls.”
Although Mr Alexander is a close ally of Nick Clegg, the Lib Dem leader wants to “differentiate” his party from the Tories in the run-up to the election. In a speech last week, Mr Cable insisted there was nothing “concrete” in the Coalition’s spending plans beyond next year’s election. He claimed the £30bn of new cuts proposed by Mr Osborne was based on “ideology” and “slashing for its own sake”.
Mr Cable insisted there were “different ways” to finish the job of tackling the deficit –including tax rises and smaller spending cuts. But Mr Osborne does not plan any tax rises.
Labour claimed Mr Alexander had “let the cat out of the bag” about the Lib Dems’ intentions on spending.
Chris Leslie, a Labour Treasury spokesman, said: “Has Danny Alexander told his Lib Dem Cabinet colleagues that he has agreed another two years of spending plans with George Osborne?”