Lib Dem Vince Cable warning over spending cuts


Business Secretary Vince Cable: ''We have got to get the balance right''

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Serious damage will be done to industry if only certain government departments are subject to spending cuts, Business Secretary Vince Cable has warned.

In a Guardian interview at the Lib Dem spring conference, he questioned whether departments such as health and development should be protected.

Mr Cable repeated his calls for more capital spending and called for pensioners' benefits to be taxed.

Such an approach has already been rejected by the prime minister.

Cabinet ministers are involved in tense discussions behind the scenes with the chancellor about future spending plans, ahead of the Budget on 20 March and a spending review in the summer.

Start Quote

We have now got to the point where further significant cuts will do enormous damage to the things that really do matter ”

End Quote Vince Cable Business Secretary

The business secretary questioned whether some departments should be protected from spending cuts, saying that in his department they had reached the point where further savings would do enormous damage to science and universities.

He said he was disturbed that 85% of future deficit reduction should come from spending cuts and only 15% from tax rises.

Mr Cable called for pensioners' benefits such as the winter fuel allowance, free TV licences and travel passes to be taxed.

He repeated his call for more capital spending and said crucial sectors of the economy such as construction needed support.

"We have done very brave things in the first spending round, but we have now got to the point where further significant cuts will do enormous damage to the things that really do matter like science, skills, innovation and universities," he said.

BBC political correspondent Louise Stewart said the Liberal Democrats were trying to move the conversation on to the economy and away from the party's ex-chief executive Lord Rennard's alleged misconduct and the conviction of former Lib Dem cabinet minister Chris Huhne.

Question and answer

Lib Dem president Tim Farron, who will formally open the Brighton conference, has said the party was in a "critical state" and its survival was not guaranteed.

But the party's chief whip in the Commons, Alistair Carmichael, insisted on Saturday that the party was "in a much better condition than people in the press would ever want the general public to know".

Former party leader Lord Ashdown is to make a speech on Saturday, and current leader Nick Clegg will do a question-and-answer session with activists.

On Friday, Mr Clegg said the Lib Dems had "let people down" by not dealing with claims made against Lord Rennard, which the peer rejects.

He told delegates allegations of inappropriate behaviour towards women would be "investigated thoroughly and independently".

Meanwhile, Huhne and his ex-wife Vicky Pryce will be sentenced on Monday for perverting the course of justice.

Senior figures in the party are facing questions about when they knew of allegations Pryce had taken speeding points on her husband's behalf.


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  • rate this

    Comment number 233.

    Vince Cable should realise that a large part our industry base is dead and gone! The systematic destruction started over 30 years ago.
    It would be a good start if this Government spent within its limits - not on what it can take in tax - as the rest of us have to.
    Does no one believe in a selective reduction of fares, costs etc to stimulate use, cash flow, and the economy as a whole?

  • rate this

    Comment number 198.

    Cable is a very ambitious man and is simply placing himself as a contender for the next leadership election . All his comments are to give him the opportunity to say "I told you so ". Its decietful to suggest taxing pensioner benefits when you know the government that you are part of have ruled it out. Cable get on message or ship out-that would show integrity and not Machiavelian meddling.

  • rate this

    Comment number 117.

    Some people think that bankers are wealth creators this is nonsense. Bankers just move other peoples wealth around. The true wealth creators are design engineers and technologists. The people who invent products that people want to buy. The economy of this country wont improve until we pay the technologists and engineers more than the accountants, lawyers and bankers.

  • rate this

    Comment number 108.

    I can't wait for the Lib Dem's extinction BUT Cable is right to make the point about cutting investment in the technologies that facilitate sales of British exports to earn foreign currency so that we earn more than we spend. ie pay down our debt & refund the NHS, etc . Propping up the NHS without a robust economy will see us all taxed more. With apologies to those who believe in the money tree

  • rate this

    Comment number 107.

    Vince Cable has to understand that the govt can no longer borrow more money! How many times do we have to say this?! The overspending has to stop and govt spending must be brought down so there is a surplus. This can then be used for emergencies but primarily for the reduction of debt. The investment in the banks can be divested over a period of 10 years at a profit and used to pay off the loans


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