Vince Cable warns Tories against ‘lazy, dangerous’ habit of relying on banks and housing market to fuel growth

Sir Vince CableSir Vince Cable
Sir Vince Cable
SIR VINCE Cable, the former Business Secretary, has warned the Government against cutting support for advanced manufacturing and the creative industries.

The man who predicted the banking crisis said he fears that Britain will return to “the lazy, dangerous habit of just relying on financial services and the housing market to keep the British economy going which is the road to ruin”.

Sir Vince is returning to his home county of Yorkshire next weekend to speak at the Ilkley Literature Festival about his new book, After The Storm.

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He told The Yorkshire Post: “The main conclusion is that a lot of the problems are still with us.

“The British economy is now in much better shape, the coalition Government probably helped with that but nonetheless we have a lot of very abnormal money policies, we still have a deficit issue, the banks are not performing the way they should be performing to support entrepreneurs, the housing market is in danger again of getting out of control - that’s less of an issue in Yorkshire than in London - so there are potential signs of trouble while at the same time we have got the unresolved issues of the eurozone and new threats coming in via China, collapsing commodity markets and so on.

“We may think that we left the crisis behind us but many of the problems are still there.”

Sir Vince served as Business Secretary from 2010-15 in the coalition Government. The Liberal Democrat lost his Twickenham seat in the general election.

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He said: “When I was in the Government we were doing quite of lot of things to put the economy on a long term recovery footing.

“Things like starting up two banks - the British Business Bank and the Green Investment Bank - starting these high-technology centres, Catapults, one of which is headquartered in Sheffield, doing a lot of promote advanced skills, the industrial strategy for advanced manufacturing and creative industries.

“The worry I now have is the current Conservative Government is not terribly interested in that kind of agenda, they are potentially cutting large amounts of money away from it.”

Academics at the Advanced Manufacturing Research Centre this week warned that cutting funding for innovation would significantly impact industrial growth.

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The Business Secretary Sajid Javid is considering whether to axe Innovate UK, which provides £600m in annual funding to commercialise university research.

Sir Vince said he would “love” the Northern Powerhouse to work “and the rhetoric is good but there isn’t an enormous amount of follow-through yet”. He said the decision to defer the electrification of the cross Pennine rail link “sends a terrible signal”.

He added: “Although I think it is good you now have more devolution to the big city areas there are too many central government restrictions on the ability of authorities to borrow and issue bonds, they still haven’t got enough freedom to set their own taxes. If the Government is serious about devolution to the North they have got to go a lot further than they are.”

‘Tories shouldn’t have won the argument on economy’

Looking back on his five years in Government, Sir Vince Cable said his biggest regret was that his Conservative partners in coalition “essentially won the argument” about the economy.

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The Liberal Democrat added: “They shouldn’t have done. The Tories’ argument is the reason we had a financial crisis is because the last Labour government spent too much money and you could criticise them for that to some extent and even more for letting the banks get out of control but that wasn’t the source of the problem.

“They have managed to change the whole debate as being one about the public debt. It’s an issue but it’s not overriding.

“In Government, we through errors of omission and commission reinforced the Tory story rather than developed an independent view about what was wrong with the economy and what we had to do about it.”

Sir Vince said he is most proud of his efforts to promote the recovery, including the setting up of the British Business Bank and Green Investment Bank, which are both fully functional and “doing good things”, the launch of a large and still expanding apprenticeship scheme, and the industrial strategy, which has had notable successes in the automotive and aerospace sectors.

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The Liberal Democrat Party was more or less wiped out in the May general elections, losing 48 of its 56 MPs.

Sir Vince said the party is still quite strong at grassroots level and could make gains if Labour supporters become disillusioned with Jeremy Corbyn’s leadership.

He said: “It worries me seriously that whatever the merits of Labour, Lib Dems and others, we don’t have an effective opposition and I think the Tories... now assume they are going to win the next election, they have got the field to themselves and yet there’s a whole lot of bad legislation that needs to be fought.

“I personally think the opposition, ourselves, Labour and even the Greens should be cooperating on particular issues and areas.”

Best at the foxtrot

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HE was known among commentators and politicians as one of the few people to warn against an impending financial crisis during the boom years.

But it was his appearance on the Strictly Come Dancing on Christmas 2010 that truly elevated this quietly spoken economist turned member of parliament into the wider public consciousness.

Sir Vince Cable has revealed that he will be returning to the dance floor to take part in the British National Dance Championships. The 72-year-old will be competing in his age group.

He told The Yorkshire Post: “It’s my hobby and I enjoy it and my teacher has put me in for the competition. I don’t expect to win but I will be taking it seriously and doing a lot of practice.

“I am best at the foxtrot but the two dances I have been entered in are for tango and rumba so I am improving the technique for both of those at the moment.”