Vince Cable, Business Secretary: Photocredit: http://www.flickr.com/photos/libdems/6162309761/sizes/z/in/photostream/
Does the government lack vision? Well, according to a letter to prime minister David Cameron from business secretary Vince Cable, it does. The letter was sent last month, but was leaked after the Liberal Democrats said they would stop their opposition of repealing the 50p top rate of tax if a tax on wealth, and a “mansion tax” on houses worth more than £2 million, was instated. The letter also comes before Chancellor George Osborne’s proposed austerity budget on the 21st March, in which the Treasury is expected to meet its forecast for a £127 billion deficit with some few billions to spare. The budget is also expected to highlight divisions between the coalition partners, and amongst the Tories themselves. You can read the letter in full here.
So is this something big? Or is it just a storm in a tea cup?
What does the letter say? That the government can’t rely solely on markets for recovery. That the Royal Bank of Scotland will have to be broken up, and a “British Business Bank with a clean balance sheet” set up in its stead. That businesses are finding it hard to gain financing. That more should be done to support house-building. That multinational firms might scale back their operations in Britain – in part due to lack of strategic thinking in past administrations. That the government should be “more strategic”, and not rely so much upon the private sector, and should outline a legal strategy for industry.
“I sense, however, there is still something important missing: a compelling vision of where the country is heading beyond sorting out the fiscal mess; and a clear and confident message about how we will earn our living in the future.” Vince Cable, quoted on The Daily Telegraph.
What does Osborne say? In a speech at the EEF manufacturers’ organisation, quoted on The Guardian, he said that the government had been credible in its means of dealing with constraining inflationary pressure, and also in the way it had supported long term low interest rates. He said that there was stability for private sector investment, and that the forthcoming budget wouldn’t put that stability at risk.
“I am bitterly disappointed that the man put in charge of the growth agenda feels there is a problem with the agenda. I find him a pleasant person to deal with. But if he is disappointed by the lack of growth, he is in as good a place as anybody in the Commons to make that clear. If he is struggling to do that, perhaps he should step aside and allow someone else to have a go,” said Tory MP Brian Binley, quoted in The Times.
What’s the reaction? Samira Shackle on The New Statesman’s Staggers blog said that the letter was “brutally frank.” Cable’s suggestions, “interventionism, patriotism, and supporting winners”, all “closely echo Labour’s line.” They are even concordant with views given by Labour leader Ed Miliband. The letter “will strike a nerve with Tory top command” for the very reason that it’s “close to the bone.” They’ll be sensitive to the fact that they haven’t got a clear strategy, and the fact that it comes from within government makes it worse.
What’s the Tory view? They’re all a bit baffled, according to The Daily Telegraph – Vince Cable is, after all the business secretary, and is in charge of most of the policy areas he’s brought up as problems.
What does Labour say? Chuka Umunna, shadow Business Secretary, said on The Independent that David Cameron and George Osborne have “become roadblocks to the modernisation and reform needed to create a more productive economy.”
What does Mr Cable say? That his letter isn’t an attack. That this in “an enormous storm made out of something much less. I think a great deal about what the Government is doing, and what my department is doing,” he said, quoted on The Daily Telegraph.
