Lib Dem conference: Cable slams Tory tax cut plan

Mr Cable stated that the Lib Dems should be pro-worker as well as pro-business as the cabinet minister made a clear pitch to the left. Picture: PA

The Business Secretary told delegates in Glasgow that the Lib Dems should be “pro-worker” as well as pro-business in a clear pitch to the left, as the

coalition government enters its final months in office ahead of the 2015 General Election.

Mr Cable accused the Tories of being “ideologically obsessed” with cuts and warned that Mr Cameron’s spending plans would do “great harm” to public services.

The Prime Minister last week pledged tax cuts for 30 million people if the Conservatives win next year’s election. Mr Cameron also said that he would raise the tax-free allowance from £10,500 to £12,500 by 2020.

And Chancellor George Osborne announced a freeze on benefits paid to people of working age for two years as part of another round of cuts after 2015.

However, Mr Cable claimed that tax rises would be needed to cut the deficit and prevent “unacceptable inequalities”.

Mr Cable, a former Glasgow Labour councillor, said: “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. I will categorically not go along with this.”

He added: “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.”

Mr Cable went on to accuse the Conservatives of wanting to destroy the welfare state, in one of his most scathing attacks yet on his party’s coalition partners.

He said: “The need for budget discipline mustn’t become an obsession with ever deeper cuts. 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.”

Mr Cable also announced a review of legally enforceable rights for workers who “don’t currently have full employment rights”.

He said: “I believe we should be pro-business but we should also be pro-worker. Which is why today I am launching a wide-ranging enquiry into the conditions of large number of workers – up to a million – who fall through the cracks and don’t currently have full employment rights. The current system enforcing these rights has failed them and needs reform.”

Mr Cable went on to defend the decision of the Lib Dems to join the Conservatives in coalition in 2010, as the minister claimed his party had been a brake on the “extremes” of Mr Cameron and Mr Osborne.

He said: “Let us remember why we are in government. That we joined the coalition because there was a national economic emergency. That we worked with the Tories because voters chose them as the largest party, not because we like them or because we are like them.

“That we have been a major engine of reform, not just a brake on their extremes. We are accused of abandoning progressive politics. We haven’t. What we have abandoned is the politics of perpetual protest.”

He also attacked Tories who back further restrictions on the number of migrants coming to the UK. Mr Cable suggested that factions in the Conservatives were anxious to pursue similar policies to the anti-EU Ukip, which could defeat the Tories in a by-election later this week in Clacton-on-Sea.

He said: “The Tories are horribly torn between open economic liberalism and their inward looking, Ukip-facing grassroots, who probably see Clacton-on-Sea as the new Constantinople – holding out against the alien hordes.”

Mr Cable added: “Our responsibility as Liberal Democrats is to tell the uncomfortable truth: that the vast majority of migrants coming to the UK from inside or outside the EU have brought tangible benefits to the economy. Of course immigration does have to be controlled at the point of entry and exit. And we must deal with abuse and crack down on ‘benefit tourism’. But not at the expense of the EU single market, and its free movement of workers.”

However, Tory MSP Alex Johnstone said: “To grow the economy we need to reward effort and David Cameron’s plans on tax will do that.

“To suggest we should be increasing taxes on hard working families is a recipe for economic disaster.”