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The Anti-Business Secretary?

Last Updated: Friday, September 24th, 2010

What are we to make of this week’s speech by Business Secretary Vince Cable to the Liberal Democrat conference?

City AM’s Allister Heath called it “nasty” and “ugly”. The CBI regretted the “emotional language”. The Legatum Institute’s Chief Economist called it “Marxist”. Former Tory MP Tim Collins, now CEO of Bell Pottinger, said that Cable’s influence in the Coalition had probably taken “a giant step backwards”.

Although I take comfort from the fact that there was a lot of rhetoric in the speech and almost no tangible change to worry entrepreneurs and investors, anti-business rhetoric is not of no consequence. At a time when Britain needs to be telling the world that the country is open for business, talk of business “spivs” and “murky” corporate behaviour can be misinterpreted. Investors can be forgiven for worrying about a political climate that fans anti-business sentiment. What will follow it?

I don’t think Cable was acting unilaterally, however. We know that his speech was cleared by Downing Street and we know that one of the first acts of Cameron, when he inherited the Tory crown in 2005, was to place a full page newspaper advert that included a warning that the “new” Conservatives would “stand up” to big business. Throughout the Cameron years the Tory leader did indeed stand up to retailers who, he thought, were peddling inappropriate goods and manufacturers who weren’t being green enough. This subsided when the more big business-friendly Ken Clarke became Shadow Business Secretary. My guess is that Team Cameron understands that the public is ready for business-bashing and a new PoliticsHome poll has found that three-quarters of voters agree with Cable. The Daily Mail – always in touch with middle England’s prejudices – also gave the Business Secretary two cheers.

The speech wasn’t all bad however. I was impressed with Mr Cable’s clarity on the budget deficit. This is what he told his party:

“In an emergency it was right to accept large scale deficit financing. But the deficit must now be corrected. Public spending was ramped up using tax windfalls which have gone. We are a poorer country than two years ago and the budget must reflect what we can afford. We know that if elected Labour planned to raise VAT.  They attack this government’s cuts but say not a peep about the £23bn of fiscal tightening Alistair Darling had already introduced. They planned to chop my department’s budget by 20 to 25%, but now they oppose every cut, ranting with synthetic rage, and refuse, point blank, to set out their alternatives. They demand a plan B but don’t have a plan A. The only tough choice they will face is which Miliband. A proper debate is impossible with people who start from the infantile proposition that there isn’t a problem; and simply hark back to a failed world of ‘business as usual’.”

Having ‘Saint Vince’ – one of the country’s most popular politicians – making such a strong argument for deficit reduction is a big deal for the Chancellor and Prime Minister. Selling the age of austerity is tough but it’s good to have the country’s third party on side in such a compelling way.


I won’t try and review the LibDem conference because The Guardian’s Andrew Sparrow has already produced a superb write up. Read it in full via but here are the two of his ten observations that stood out to me:

  • The Lib Dems have made up their minds about the coalition – and they like it. Journalists came to Liverpool expecting to find evidence of a grassroots backlash against Nick Clegg’s decision to go into coalition with the Tories. Well, forget it. There have been grumbles, but (this week) they have been inconsequential. In so far as you can say what the party as a whole thinks, it’s broadly happy with the coalition, and expects it to last.
  • The Lib Dems understand coalition politics better than the media. Westminster journalists like me are often asking the Lib Dems how they will fight an election against the Tories after five years of coalition. Lib Dems are genuinely bemused by this. They point out that this is not a problem in Scotland, Wales, local government or continental Europe – all places where three-party politics is more entrenched than Westminster. At a fringe meeting last night, Ashdown asked delegates to put their hands up if they had shared power with another party. Dozens of them responded. Then he asked if anyone in that group had had a problem fighting an election against their coalition partners. No one thought it was an issue.



Vince’s views on tax, not banks, are the problem: “The biggest problem with Cable isn’t his views on banks, but his stance on tax.  He conceded that higher taxes bring in little extra revenue, but are there to ensure that “the broadest backs carry the biggest burden”.  He itemised for the Liberal Democrat’s victories on tax: no inheritance tax cuts, the capital gains tax rise, income tax reductions for poorer workers only. Indeed, he went further by banging on about his beloved mansion tax, regretting that it hasn’t made it into the Coalition Agreement.  And he emphasised his own personal commitment to higher taxes in the form of a graduate tax of some sort, which he told the conference he was pushing for “as best I can”.” More:

What does George Osborne think of green taxes? “Early in the last Parliament George Osborne saw green taxes as an ethical way of raising taxes on something that is ‘bad’ – pollution – in order to cut them on socially beneficial things – such as marriage. Later in the Parliament he and other Tories appeared to switch tack – emphasising encouragement of green behaviour, rather than penalising ‘dirty’ behaviour. During their green tax phase the Conservatives promised to put all extra revenues from any environmental levies into a ringfenced fund that would be used to afford lower taxation on married couples and other families.” More:

The Cabinet has not collectively discussed spending allocations: “It’s beginning to emerge that there’s been no Cabinet debate about where the spending axe should fall.  Several senior sources have confirmed this to ConservativeHome, and some would like a collegiate discussion.  Two main views can be taken of this prospect.  The first is that the Prime Minister should essentially be a first among equals, and that Cabinet meetings should be a collective means of resolving difficult issues (such as this one).  The second is that a modern Prime Minister can’t, as John Major did, attempt to lead a “government of chums”. He or she must lead from the front – like Thatcher and even (very arguably) like Blair, in some respects at least.” More:

Why some Tories will never warm to Nick Clegg: “Other than his enthusiasm for all things EU… his support for a softer prisons policy… his opposition to reform of the Human Rights Act… his relaxed approach to immigration controls… his electoral reform agenda… his opposition to Cameron’s marriage policy… his position on nuclear power… his opposition to full Trident renewal… his support for the 50p tax on entrepreneurs… his willingness to subcontract the UK right of self-defence policy to the UN… opposition to grammar schools… belief in radical action on climate change… and his defence of the BBC… we can all agree Clegg is great!” More:

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