THE coalition government will have to perform a delicate balancing act when the Budget is delivered today if it is to avoid a rebellion on the Tory or Liberal Democrat backbenches.
Yesterday, sources close to Deputy Prime Minister Nick Clegg insisted the Budget would adhere to the party’s belief in “fairer taxation”, a pledge that defined its election campaign.
They said Lib Dem backbench MPs would take comfort from the fact the Budget contains a hike in capital gains tax and a £1,000 increase in the income tax threshold.
“We fought hard for these measures – they wouldn’t be there if we hadn’t,” a Lib Dem official said.
Yesterday, Clegg tried to stop a rebellion among grass roots members in its tracks by reminding activists Labour was also planning huge spending cuts.
“The Labour party will say that these decisions are not justified. They will say the Budget creates risks for our economy and that Liberal Democrats have sold out,” he wrote in an email.
“Every time you hear Labour say that, ask why they covered up the details of the £44bn of cuts they themselves had planned.”
But some Lib Dem MPs have already broken ranks to warn they could not vote for a Budget that contained large cuts to the welfare budget.
Bob Russell, the Liberal MP for Colchester, has warned his “principles and conscience can’t be parked elsewhere” even if his party is signed up to coalition government.
“I supported the formation of the coalition through gritted teeth but I have never voted for big cuts in welfare benefits and I am not going to start now.”
The Unite union has also urged its members to tear up their Liberal Democrat cards if the party backs swingeing spending cuts.
And yesterday Labour leadership contender Ed Miliband called on Lib Dem MPs to vote against the Budget.
“I say to the Lib Dems very clearly that they should exercise their consciences and be willing to oppose this Budget, on issues such as VAT and fairness,” he said
Meanwhile, several Tory backbenchers – including John Redwood and David Davis – have expressed disquiet over plans to hike capital gains tax. Both supported a City A.M. campaign calling on the government to introduce a taper relief scheme that would ensure long-term savers were not punished.
The chancellor will be hoping that a raft of allowances for entrepreneurs will quell any dissent.
With a commons majority of 87, neither rebellion is likely to bring the coalition down, although it could signal the end of the honeymoon period.