Taxes must go up to deal with Britain’s budget deficit, Liberal Democrat Business Secretary Vince Cable has warned.
In a dig at his Conservative coalition partners, he said: “Any politician who tells you that the next Government can balance the budget and avoid tax increases is lying to you.”
It follows last week’s Conservative conference, in which Tory Chancellor George Osborne announced plans to cut income tax while also getting rid of the deficit by 2020.
Dr Cable told activists at the Lib Dem annual conference: “One of the lingering legacies is the budget deficit and yes the deficit has to be dealt with. But the need for budget discipline mustn’t become an obsession with ever deeper cuts in public spending.
“Key public services have already been cut to the bone from legal aid and local government, to policing and defence. The Tories are ideologically obsessed by cuts because they see it as a way of destroying public service and the welfare state, which they detest.”
And he slammed plans set out by George Osborne, the Tory chancellor, during the Conservative conference.
“Let us be clear. The Tories’ proposal to take another £25 billion or more out of welfare and unprotected Government departments will do great harm to valuable services: to imagine otherwise is fantasy.”
In a sign that he would not join any future coalition government that planned to make such cuts, Dr Cable said: “I will categorically not go along with this.”
But he said the alternative would be to increase taxes.
“The truth is more taxes will be needed. To contribute to deficit reduction and also to address unacceptable inequalities. Any politician who tells you that the next Government can balance the budget and avoid tax increases is lying to you.”
Dr Cable also backed plans endorsed by the party conference to give councils the right to opt out of the right to buy policy, which allows council tenants to buy their homes.
Rather than helping people on the housing ladder the policy just drives up prices, he said.
The policy paper, called Building the Affordable Homes We Need, calls for government investment to build new homes affordable to people on low and middle incomes.
It commits the Liberal Democrats to a Housing Investment Bank tasked with simplifying the allocation of public funds and drawing in private finance to help with house building.
The policy would also allow councils to develop homes on a broader basis as part of a package of measures aimed at creating the capacity in the house building market to provide 300,000 properties a year.
Energy Secretary Ed Davey will today announce that householders in England and Wales are to be offered an additional £100 million to fund energy-saving home improvements, after a Government scheme proved so popular it ran out of cash within three months.
Applications for the first tranche of grants under the £450 million Green Deal - intended to help fund items like wall insulation, double-glazing and new boilers - opened in May, but the first year’s money was all scooped up by the end of July, leaving a gap of several months before would-be home improvers could make fresh bids.
Aides said the new cash would help fill that gap and would remain on offer until it has all been spent.
Mr Davey will say that Lib Dems have delivered “dramatic reform” in the energy market.
The North East Chamber of Commerce, however, has warned the review should not hamper businesses in the region as the economy begins to recover.
NECC Policy and Research Manager Mark Stephenson said: “Protecting the rights of employees is fundamental for any well-run business and we welcome the efforts of the Government to address the issue.
“However, with the steady growth we are seeing across the economy, it is important that this review does not place a bureaucratic burden on our businesses at a time when they are solely focused on driving forward regional growth, creating jobs and opening up new markets. Businesses are already facing capacity constraints which may ultimately hold back investment. Government should make it easier rather than harder for employers to take on new staff and a balanced approach in this regard will be welcomed by business.”