Lib Dem conference: Cable likens economic crisis to war

 

Vince Cable set out his three priorities: stability, stimulus and solidarity

Business Secretary Vince Cable has told the Liberal Democrat conference that the economic challenges facing the UK are the "equivalent of war".

In a bleak assessment of the future, he said the era of ever-rising living standards had ended and people were just worrying about "how to survive".

It is the latest in a series of warnings from senior Lib Dem figures about the state of the economy.

In his speech, Mr Cable also called for more controls over executive pay.

Mr Cable told delegates that he believed that public "was tired of being lied to" and he would not pretend that there were not "difficult times ahead" for the economy.

'Survival'

"Britain's post-war pattern of ever-rising living standards has been broken by the financial collapse," he said. "People are not thinking about 10 years ahead when they are worrying abut how to survive the next 10 days to payday."

Analysis

"We now face a crisis that is the economic equivalent of war."

We probably haven't heard as dramatic a statement from a government minister about the state of the economy.

Vince Cable has left us in no doubt how he sees it - if there are "sunny uplands" then they are way off on the horizon.

Though he didn't refer to it, this morning there was more bad news from the Financial Times, which reckons there's a further £12bn black hole in the UK budget.

It rather puts into context the big announcement of the day: of the new jobs and factory at Jaguar Land Rover.

They are, of course, something to celebrate, but Mr Cable's speech made clear how gloomy the outlook really is.

He compared the challenges facing the current Conservative-Lib Dem administration to those confronted by Winston Churchill's coalition government during World War Two, saying the severity of the situation meant it was right for two parties to work together.

"Now you could say, that was war, that is different. Yes it is different. But we now face a crisis that is the economic equivalent of war.

"This is not a time for business as usual or politics as usual".

Mr Cable warned the UK could not blame its current flagging growth on the turmoil in the eurozone or a weak US economy as many of its problems were "home-grown".

'No Father Christmas'

Warning against "Father Christmas" tax cuts or giveaways, he said targeted investment in infrastructure, support for manufacturing and a fundamental restructuring of the banking system were important steps to "rebuilding our broken economy from the rubble".

The BBC's Chief Political Correspondent Norman Smith said senior Lib Dems had struck a relentlessly downbeat tone about the economy in recent days.

Chief Secretary to the Treasury Danny Alexander told the BBC that the world economy was in a "very serious situation" and the country faces a "long, hard road back to recovery".

Lib Dem leader Nick Clegg has said the economic model of recent decades - focused on the City and the south-east of England - had collapsed and it would take a generation to build something new.

But they have all insisted that, while more can be done to stimulate economic activity, the coalition must stick by its target of eliminating the deficit over the next four years.

Mr Cable told conference the public would "only accept continuing austerity if it is seen to be fair".

"Yet there is currently a great sense of grievance that workers and pensioners are paying the penalty for a crisis they did not create. I want a real sense of solidarity."

'Disparities of wealth'

He said the Liberal Democrats must continue to press for a reduction in the tax burden on low and middle earners - and ensure the wealthiest continued to pay the most.

Start Quote

On curbing top executives' pay they are only launching a consultation into how to have greater transparency - a policy the Conservatives advocated before the last election”

End Quote

He did not mention the 50p top rate of tax - something other Lib Dems have vowed must remain in place - but did signal his continued commitment to some form of "mansion tax" on large properties - an idea which was widely criticised when he proposed it in opposition.

"What Liberal Democrats should focus on are the vast disparities in wealth - much of it in inflated property and land prices artificially generated by the boom of the last decade," he said.

"When some critics attack our party policy of a tax on properties over £2 million by saying it is an attack on ordinary middle class owners, you wonder what part of the solar system they live in."

He also insisted the Lib Dems in government had made "real achievements", such as on apprenticeships, the green investment bank and Post Office reform.

'Responsible capitalism'

Stressing the theme of "responsible capitalism", Mr Cable also vowed to tackle "the escalation of executive pay" which he claimed was not linked to share values.

Mr Cable has published a discussion paper aimed at curbing multi-million pound pay packages. Downing Street said there would now be "further discussions" on its contents.

Saying he regretted not doing more to curb bank bonuses over the past year, Mr Cable proposed requiring companies to set out the criteria used to determine pay and perks and putting employee representatives on remuneration committees.

"Surely pay should be transparent; not hidden from shareholders, and the public. I want to call time on pay outs for failure."

Labour said Mr Cable should be judged by his actions not his words.

"Vince Cable says his biggest regret from the last year is not tackling bank bonuses but it should be his complete failure to support business, create jobs, help small and medium enterprises to access finance and to build on the growth he inherited from Labour," said shadow business secretary John Denham.

"The recovery has been choked off and yet..he still relentlessly supports (chancellor) George Osborne's reckless policy of cutting too far and too fast."

 

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  • rate this
    0

    Comment number 811.

    What a speech.

    It's like being in the Somme for 2 years & then deciding, hey this is serious & we're getting nowhere.

    Previously, governments have offered carrots to gain political advantage, all thats left is a few potatoes, UK & west better get used to political carrot famine and get attuned to a staple political diet of potatoes, which are currently being dyed to look like carrots

  • rate this
    0

    Comment number 810.

    The only way I can see the political situation being resolved is for those new intake politicians and disillusioned back benchers from the three main parties to form a brand new RADICAL party with a realistic mandate to present to the electorate in a fresh G/E. There are some sound politicians but sadly they are scarce and the old tribal loyalties have to be discarded in the national interest.

  • rate this
    +1

    Comment number 809.

    @805.triscar

    I meant that the debt level remained lower than that inherited in 1997 until the financial crises. Debt rarely stayed below 40% of GDP for long throughout the 20th century so hardly historically shocking stats.

    I am not defending Labour's record, but evidently the Tories don't have the answers either.

  • rate this
    -1

    Comment number 808.

    //triscar
    Anglophoney @ 803
    "From 1997 the Labour government reduced levels of debt right up to the finacial crises and bank bailouts."
    How did you conclude that from the numbers? The debt started rising again in 2003 - 5 whole years before the bank bailout.//

    And Labour policies - bloated pubic sector, welfare dependency, immigration etc, were steering us on to the rocksfrom the start.

  • rate this
    +4

    Comment number 807.

    I have said this in other posts but until we get over this idea of enternal growth we can never move on. Nothing lasts forever and at this time the growth mantra are just hollow words. If people really believe the economy can grow forever then they are totally misguided and ill-informed. At this time we must look at sustaining not growing. We need an economic revolution!

  • rate this
    +1

    Comment number 806.

    Ian @782
    "It is so unfair that ordinary people and families are finding it hard to cope.Through no fault of their own,We elect these politicians to run the country for us the people,but do they know what they are doing"

    That's because people vote out of greed, for who promises them the most stuff, opting for short term personal gain over long term planning.

  • rate this
    0

    Comment number 805.

    Anglophoney @ 803
    "From 1997 the Labour government reduced levels of debt right up to the finacial crises and bank bailouts."

    How did you conclude that from the numbers? The debt started rising again in 2003 - 5 whole years before the bank bailout.

  • rate this
    0

    Comment number 804.

    The libdems have simply rediscovered their 'spin',the same one clegg used to hoodwink the public just prior to the general election,18 months ago,on those so-called TV 'debates'.

    So we now have Werthers original cable singing one tune,and sherbert dab clegg singing another,so they can assume they've somehow pleased everyone.

    Time to get off the merry go round,it's making them even more dizzy.

  • rate this
    0

    Comment number 803.

    @712.triscar

    Thanks for looking up the figures. I was just being lazy, but much as I suspected the last Labour governement were no worse than preceding Tory ones regarding debt .

    From 1997 the Labour government reduced levels of debt right up to the finacial crises and bank bailouts. What they were guilty of was tying our economic future to irresponsible gambling in the City.

  • rate this
    0

    Comment number 802.

    Vince Cable for PM!!!

  • rate this
    +1

    Comment number 801.

    Government policy starting to have an impact on jobs - Subsidise new engine plant creating jobs in Midlands.
    Impact on engine plant jobs in South Wales ?
    Bosch came to South Wales with goverment subsidy, then went to Hungary with further subsidy. Jobs gone.
    Happens everywhere.
    One day, they'll be able to write using joined letters.

  • rate this
    0

    Comment number 800.

    Nationalise all means of production and distribution - and the banks.

  • rate this
    0

    Comment number 799.

    " ian
    We elect these politicians to run the country for us the people,but do they know what they are doing."

    Have you ever tried running a country? If you think you can do better then stand for public office.

  • rate this
    +4

    Comment number 798.

    Think you'll find that all the British public are shareholders. Clegg has just admitted live on BBC Breakfast that the Jaguar engine plant has been paid for with public funds. One of the endless cases of lining the pockets of private business with public money. hardly surprising though, considering that Socialism has been outlawed.

  • rate this
    +2

    Comment number 797.

    An honest politician at last, Cable got it right. We've never had it so good, so get used to it getting worse.

  • rate this
    +3

    Comment number 796.

    What a mature and crredible speech - The Truth out at last - My only worry is just how long Mr.Cable will be there.

    However Clegg is still arrogant in his criticism - Mr.Cable told the TRUTH - we are in for at least five years of further squeezing and lack of work !

    Question Please - Where is all the money coming from to fund Libya

    Let's have another election to establish the TRUTH !

  • rate this
    +2

    Comment number 795.

    Why cant these bankrupt politicians with their bankrupt political claptrap just be honest for once? The truth is this country like many others has run out of money and the present political set up has not changed anything.Look at the figures or the disinformation spewed out on a daily basis,all done to confuse us all.We need a revolution of the majority against those who control us.A new order?

  • rate this
    +3

    Comment number 794.

    Mr Cable's colourful language tell us more about the threat from his own party members who don't have the stomach to face economic reality. In their hearts Liberals believe that the UK should spend it's way out of recession. So, to take the war analogy one setp further, the Liberal leadership is the thin red line standing between survival and a Greek scale Keynesian disaster. God help us.

  • rate this
    +1

    Comment number 793.

    Yhe financial collapse of the Western world will eventually lead to war . The only way that the industrial military complex of the USA ever prospers is by war. They need a war so that they can produce more weapons to sell to the puppet leaders that they install once the war is over. Having destoyed a country's infrastructure they profit by rebuilding it, & like locusts move to the next victim.

  • rate this
    0

    Comment number 792.

    I am sure that the freedom-of-speech so proudly on display here will soon have the bad guys running.

 

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