The poster that the Lib Dems want you to forget

And how Osborne misled us all over his VAT increase.

Lib Dem

It was unclear whether George Osborne would raise VAT right up until the moment he stood up in the Commons. After all, during the election campaign, the then shadow chancellor insisted he had "no plans" to raise this regressive tax.

Here's the key quotation:

The plans we set out involved around 80 per cent of the work coming from spending restraint and about 20 per cent from tax increases . . . The tax increases are already in place; the plans do not include an increase in VAT.

Nothing has changed since then to necessitate a sharp rise in VAT to 20 per cent (as Will Straw points out, this was far from an "unavoidable" tax increase). In fact, the deficit, then thought to stand at £167bn, is now £149bn. The grim conclusion must be that Osborne hid this tax rise from the voters for electoral purposes.

There were some key figures, the Lib Dems and Ed Balls among them, prepared to sound the alarm during the campaign. Nick Clegg's party even released a now infamous poster warning of a Tory VAT "bombshell". They were right about that but, presumably, never planned to help drop it.

One wonders how Simon Hughes, who last week denounced VAT as "the most regressive tax", feels today. Will the Lib Dems' deputy leader have the courage to speak up for his party's grass roots? Will Charles Kennedy? Will Paddy Ashdown? One hopes so.

There is no doubt that this tax rise will hit the poorest hardest. As the Fabian Society's Tim Horton has noted, while the richest 10 per cent pay £1 in every £25 in VAT, the poorest 10 per cent pay £1 in every £7.

But not only is this tax hike socially unjust, it is also economically defective. With growth weaker than expected, there are few worse possible responses than raising VAT.

A recent report for the Centre for Retail Research found that raising the VAT rate to 20 per cent would cost each household £425 a year on average. It added that the resultant drop in consumer spending could cost 47,000 jobs and lead to the closure of almost 10,000 shops.

In the Commons, as Harriet Harman attacked the Lib Dems' betrayal and Danny Alexander and Nick Clegg smirked away, one was reminded of the closing words of George Orwell's Animal Farm:

The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which.

Today was the day that the Lib Dems lost their soul.

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George Eaton is political editor of the New Statesman.

Photo: Getty
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The campaign to keep Britain in Europe must be based on hope, not fear

Together we can show the world a generous, outward-facing Britain we can all be proud of.

Today the Liberal Democrats launched our national campaign to keep Britain in Europe. With the polls showing the outcome of this referendum is on a knife-edge, our party is determined to play a decisive role in this once in a generation fight. This will not be an easy campaign. But it is one we will relish as the UK's most outward-looking and internationalist party. Together in Europe the UK has delivered peace, created the world’s largest free trade area and given the British people the opportunity to live, work and travel freely across the continent. Now is the time to build on these achievements, not throw them all away.

Already we are hearing fear-mongering from both sides in this heated debate. On the one hand, Ukip and the feuding Leave campaigns have shamelessly seized on the events in Cologne at New Year to claim that British women will be at risk if the UK stays in Europe. On the other, David Cameron claims that the refugees he derides as a "bunch of migrants" in Calais will all descend on the other side of the Channel the minute Britain leaves the EU. The British public deserve better than this. Rather than constant mud-slinging and politicising of the world's biggest humanitarian crisis since the Second World War, we need a frank and honest debate about what is really at stake. Most importantly this should be a positive campaign, one that is fought on hope and not on fear. As we have a seen in Scotland, a referendum won through scare tactics alone risks winning the battle but losing the war.

The voice of business and civil society, from scientists and the police to environmental charities, have a crucial role to play in explaining how being in the EU benefits the British economy and enhances people's everyday lives. All those who believe in Britain's EU membership must not be afraid to speak out and make the positive case why being in Europe makes us more prosperous, stable and secure. Because at its heart this debate is not just about facts and figures, it is about what kind of country we want to be.

The Leave campaigns cannot agree what they believe in. Some want the UK to be an offshore, deregulated tax haven, others advocate a protectionist, mean-hearted country that shuts it doors to the world. As with so many populist movements, from Putin to Trump, they are defined not by what they are for but what they are against. Their failure to come up with a credible vision for our country's future is not patriotic, it is irresponsible.

This leaves the field open to put forward a united vision of Britain's place in Europe and the world. Liberal Democrats are clear what we believe in: an open, inclusive and tolerant nation that stands tall in the world and doesn't hide from it. We are not uncritical of the EU's institutions. Indeed as Liberals, we fiercely believe that power must be devolved to the lowest possible level, empowering communities and individuals wherever possible to make decisions for themselves. But we recognise that staying in Europe is the best way to find the solutions to the problems that don't stop at borders, rather than leaving them to our children and grandchildren. We believe Britain must put itself at the heart of our continent's future and shape a more effective and more accountable Europe, focused on responding to major global challenges we face.

Together in Europe we can build a strong and prosperous future, from pioneering research into life-saving new medicines to tackling climate change and fighting international crime. Together we can provide hope for the desperate and spread the peace we now take for granted to the rest of the world. And together we can show the world a generous, outward-facing Britain we can all be proud of. So if you agree then join the Liberal Democrat campaign today, to remain in together, and to stand up for the type of Britain you think we should be.