The West Lib Dem leading the "not nuclear" VAT rebellion

My revelation in yesterday's Western Morning News that Andrew George is seeking to amend the Finance Bill has been picked up by some of the nationals today and will likely dominate coverage of the Lib Dems this week.

Andrew, who rightly sees this as a matter of principle over fairness, is stressing that this is a "tiny storm in a very small teacup". Some of his colleagues might disagree.

Here is yesterday's story:

The coalition government is to face a direct challenge to its claim that the hike in VAT to 20 per cent will not hit the poorest hardest, in a revolt led by a Westcountry Liberal Democrat MP.

Andrew George has defied his party leadership to table an amendment to the Finance Bill which would implement George Osborne’s Emergency Budget.

The St Ives MP is the architect of a move to embarrass the government into reconsidering how the tax-raising, budget-cutting package will affect the worst off.

Lib Dem HQ was desperately trying to quell the rebellion, after deputy leader Simon Hughes suggested on Thursday that the party could “come forward with amendments” to make the Budget fairer.

In a statement yesterday the party insisted there were "no plans" to amend the Budget. It was claimed Mr Hughes had been referring to a "hypothetical situation".

But the Western Morning News can reveal that Mr George and three other Lib Dems have tabled an amendment to the Budget for Monday which, if debated, could open the door for other senior Lib Dems to criticise the VAT move.

The amendment demands the Government carry out “an assessment of the impact of the increases it proposes upon business, charities and households across the income and age groups”.

Such a report would have to be laid before the House of Commons for a full debate. The amendment is backed by Lib Dem firebrand Bob Russell who threatened within hours of Mr Osborne’s Budget to vote against it.

Mr George has stressed to colleagues that he is not seeking to trigger “nuclear war” in the party but believes the issue of fairness needs to be addressed.

Earlier this week he told the WMN that VAT was a “regressive tax” which “hit the poorest more than it hits the wealthiest”, despite bankers being to blame for the economic collapse.

“On that basis it didn’t chime with the stated purpose that those who got us into the doo-doos should pay the cost of getting us out.”

Critics of the VAT move say the low paid spend disproportionately more of their income on the duty than the wealthiest. It is especially embarrassing for the Lib Dems, who launched a poster campaign claiming the Tories were planning a VAT “tax bombshell” during the election.

A study by the South West Observatory earlier this week suggested 10,800 jobs could be lost in the region if VAT rose to 20 per cent.

Several senior Westcountry Lib Dems this week criticised the move, claiming old Tory ideology of punishing the poor had won through.

Lib Dem Treasury Chief Secretary Danny Alexander has defended the rise from 17.5 per cent to 20 per cent as “unavoidable”. He said the only alternative was still deeper spending cuts.

Labour has accused the Lib Dems of acting as “fig leaves” for a Budget that would hit the most vulnerable hardest.

But Lib Dem defence minister Nick Harvey said the state of the public finances left the Treasury with little choice.

“Nobody would want to take any of the measures taken in the Budget. The financial situation is worse even than we realised,” he told the WMN.

“Nobody in the election seemed to be acknowledging there was going to be a VAT rise. I would prefer there didn’t have to be. It is something that had to happen. It may not prove to be permanent.”

Mr George’s amendment is listed on the order paper for debate on Monday afternoon.