Cable admits poll VAT scare was 'scoring point'

Mr Cable said the increase to 20 per cent in last week's Budget had been necessary to tackle the deficit, and insisted the overall package had protected the poor.

His strong defence of the move came despite polls suggesting that it has led to a slump in support for the Lib Dems.

Speaking on the BBC's Andrew Marr Show yesterday, the Cabinet Minister dodged questions about whether he was embarrassed by the campaign poster warning of a "Tory VAT bombshell". "We were trying to score a point against the Conservatives, if you like," he said.

"Okay, well that was in the election. We have now moved past the election."

Mr Cable stressed that he had not posed with the poster, which was unveiled by his party leader Nick Clegg, MP for Sheffield Hallam.

"I didn't (pose with the poster) actually. What I said repeatedly, and we had chancellors debates... we said over and over again VAT could not be ruled out. All three parties used exactly the same language."

Mr Cable denied that the Budget would hit those on lower incomes hardest, claiming that moves such as raising the income tax threshold offset the impact of the VAT rise.

"If you look at the package as a whole that makes the balance much better and more equitable," he said.

He also played down a suggestion from the Lib Dems' new deputy leader Simon Hughes that backbench MPs could seek to amend the Budget.

"Simon Hughes is not going to to put down amendments to the Budget," he said. "I think that is fairly clear. He was taken out of context."

Mr Cable insisted discussions within the Cabinet over a cap on non-EU immigration – a Tory policy that has been accepted by the Lib Dems at part of the coalition deal – had been "collegiate".

Labour leadership contender Ed Miliband, MP for Doncaster North, told BBC1's Politics Show the Lib Dems were supporting "the most Right-wing budget I can remember in my political lifetime".