The Treasury has announced the biggest financial cuts in 80 years - after reducing welfare and NHS spending - in a desperate attempt to balance the books.
Chancellor George Osborne yesterday outlined plans in the Autumn Statement to reduce public spending to 35 per cent of GDP - which is the lowest level since the 1930s - after admitting failure to hit economic targets.
Cuts are expected to be made in non-protected departments such as police, local government and justice in a mission to reduce £147bn spending to £86bn by 2019/2020 following a £5bn overspend which has caused the £1.5 trillion national debt to continue rising.
Robert Chote, chairman of the Office for Budget Responsibility, predicts a "very sharp squeeze" as only 40 per cent of cuts deemed to be necessary have been made in the current parliament while the next is required to account for the remaining 60 per cent.
The OBR said: "Total public spending is now projected to fall to 35.2% of GDP by 2019-20, taking it below the previous post-war lows reached in 1957-8 and 1999-2000 to what would probably be its lowest level in 80 years".
Lib Dem leader and Deputy Prime Minister Nick Clegg, who was absent from the House of Commons for the Autumn Statement, has described Tory plans to cut budgets and welfare before raising taxes on the extremely wealthy as "complete and utter nonsense".
Mr Cable also condemned Conservative party members for wanting to cut public spending "rather more brutally than we think is necessary or desirable" and their plans to lower it to 35 per cent of GDP were "simply not realisable".
Treasury Chief Secretary Danny Alexander suggested that extra taxes on the wealthy could be a deal breaker in any coalition negotiations during the General Election next May.
Mr Osborne said he is introducing a 25 per cent tax on profits generated by multinational companies who benefit from trading in the UK but shift their profits overseas to avoid paying their share.
The income tax personal allowance is set to rise to £10,600 per annum while the higher rate salary threshold is expected to rise to £42,385.
He also announced Stamp Duty reforms, VAT refunds for some emergency services and hospice charities, and plans to abolish out-of-work benefits for migrants with no prospect of work.
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