The Guardian reports:

Vince Cable has warned that George Osborne has no room in next Wednesday’s budget for a substantial pre-election giveaway, but acknowledged that there was some headroom in the public finances for modest tax cuts or an increase in public spending.

The Liberal Democrat business secretary indicated the chancellor had a sum estimated at £5bn – that could be used to increase the personal allowance tax threshold or to row back from plans to cut public spending back to the level of the 1930s in the next parliament.

In an interview with the Guardian a few days before the last major financial event of the coalition government, Cable said: “This budget, I think there is a common agreement across the coalition, cannot be some kind of pre-election bonanza because that would completely undermine credibility.”

He said that although the country’s fiscal position is a better since the chancellor delivered the autumn statement in December, there were “still quite serious tasks to be done in completing the process of reducing the structural deficit, and anyway, the public would see through some transparent budget with lots of rabbits appearing all over the place”.

But Vince made clear that the party has pushed hard to make sure there is a clear Lib Dem thread running through the budget:

Cable also said that the Lib Dems had been closely involved with the setting of the budget, and that it would not be effectively hijacked by the Conservatives. He added: “We are insisting that it is a coalition budget. The process is in place to make sure that it is.”

The Lib Dems have been pressing for a further rise in the £10,000 a year personal tax allowance – the sum before which any income tax is paid – in an effort to press home his party’s ownership of the single biggest tax reform of the parliament. The allowance is already projected to rise to £10,600 from April.

You can read the Guardian’s full piece here.

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