Nick Clegg is suffering a fierce public backlash over the coalition's VAT rise, with almost half of Liberal Democrat supporters saying the tax U-turn makes them more likely to desert the party.
A YouGov/Brand Democracy survey, which will alarm already restive Lib Dem MPs, shows 48% of those who voted Lib Dem at the election are now less inclined to back them again as a direct result of the increase in VAT from 17.5% to 20%.
Clegg campaigned vigorously against a VAT rise in the election campaign, warning of a Tory VAT "bombshell". But since he signed off on Tuesday's emergency budget which announced an increase from January next year, the Lib Dem leader has argued that a rise was "unavoidable" because the public finances were in a far worse state than the new government expected.
The poll results will spread unease in party ranks as MPs prepare for a Commons vote on Tuesday on George Osborne's emergency package of cuts and tax increases. They will also raise fears about the coalition's ability to survive for a full parliament as the austerity programme tests the patience of ordinary Lib Dem supporters.
The findings emerged as David Cameron seeks to mend a rift with Washington over economic policy at his first G20 summit as prime minister in Toronto, Canada. Barack Obama's administration has warned EU nations, including the UK, of risking global economic recovery with overly harsh austerity programmes. Cameron travelled the 124 miles to Toronto from Deerhurst, where the G8 leaders met yesterday, with Obama in Marine One, the presidential helicopter.
In an article for the Observer today, the Lib Dem chief secretary to the treasury, Danny Alexander, admits that measures including the VAT rise are not proving popular with some party members and that tax increases run contrary to the Lib Dem election manifesto.
But in terms that are hotly contested by Labour and many economists, he says the move was "unavoidable". "The Liberal Democrat manifesto was clear that we aimed to eliminate the deficit solely through spending cuts, only considering further tax rises if necessary on grounds of fairness," Alexander writes.
"With the structural deficit £12bn larger than Labour claimed, we could have filled that black hole with more spending cuts. This would have made it impossible to protect the most essential services, so the VAT rise was unavoidable. Raising income tax would reduce the rewards for work at a time when hard work will lead the recovery."
The poll of almost 2,500 people, financed by Ed Miliband's campaign for the Labour leadership, found 26% of people "somewhat" less likely to vote Lib Dem because of the VAT U-turn and 22% much less likely.
Among supporters of all parties, 34% said the VAT hike had put them off voting Lib Dem. A total of 25% of Lib Dems would be less likely to vote for the party again as a result of the budget decision to freeze child benefit for three years.
There will be more uncomfortable reading for Liberal Democrats today as a new study exposes the scale of pain the emergency budget is likely to inflict on the country's poorest families.
The study by economists Howard Reed and Tim Horton says those earning under £14,200 will be hit six times harder than those at the top of the pay scale, earning more than £49,700.
Last night there were signs that world leaders would agree to gloss over their differences in the G20 communiqué, recognising the merit of countries scaling back budget deficits. The communiqué is expected to offer the best of both worlds, commending those that have started to tackle large deficits while supporting those – such as the US – where the state of the economy means maintaining a stimulus is more palatable.
Yesterday, all the main candidates in the Labour leadership sought to exploit public anxiety about the budget.
Ed Miliband, who has accused the Lib Dems of betraying their traditions by agreeing to slash the size of the state, said: "If this poll is an indication, the Lib Dems face extinction as a progressive force. Lib Dems MPs have a chance to vote against the budget on Tuesday, but if they fail to do so and lead their party into oblivion, the Labour party must reach out to their voters, and build the progressive movement for the future."
His brother David Miliband, also writing in the Observer, said it was up to Labour's next leader to appeal to, and work for, what would be a "lost generation" of young people.
Former health secretary Andy Burnham said the cuts would devastate social care. "Care services are already under severe pressure and in many parts of the country there will be little left if these cuts go ahead."
Meanwhile in a "question and answer" in today's Observer, Ed Balls promotes a "fairness" agenda, saying he would increase tax on those earning over £100,000. "If I had to raise money now, I would start the 50p top rate at £100,000, not £150,000. It's much fairer than VAT, which hits the poorest hardest."
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