Coalition at ''odds over benefits and public sector pay''

Some Liberal Democrats are said to be in revolt over George Osborne''s cost cutting measures proposed for tomorrow''s (June 22nd''s) emergency Budget.

As the UK battles a £156 billion budget deficit, the chancellor is widely expected to reduce pay and benefits in the public sector, as well as cutting support for those who are out of work.

VAT is also likely to be increased, although not by as much as the doubling of the tax which took place when Margaret Thatcher came to power in 1979.

Liberal Democrat MP Bob Russell said that, apart from Vince Cable, the party members in the coalition were not representative of the centre-left ethos.

"I supported the formation of the coalition through gritted teeth but I have never voted for big cuts in welfare benefits and I am not going to start now," he told the Mail on Sunday.

Writing in the Telegraph, former chancellor Lord Lamont said Mr Osborne was in a strong position to implement unpopular policies as the electorate realised the situation was created under the previous government.
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