December 3, 2007
From comedian to doomsayer
The briefing session started with a chirpy "Hi I’m Vince Cable" and ended with me walking out of the room fumbling around for my phone to withdraw an offer I’ve just made on a house. "After a week of jokes" the acting Liberal Democrat leader, part time comedian and Brown baiter thought he "should get down to something more serious". It is hard to know what Gordon Brown will be more scared of.
Mr Cable returned to his favourite riff: Britain’s housing market is in the midst of a "grossly inflated bubble" that is about to burst. This time he came armed with slides - terrifyingly pointy slides. "The logic of the position is painfully clear," he told us. "It is going to crash."
It certainly grabbed the attention of most of my erstwhile colleagues in the room. When he said "something very big is now happening", you could sense the journalists scribbling down his words believed it was more than just a Lib Dem presser. It was almost as if "Professor" Cable, doomsayer and former Shell economist, had hijacked a room in parliament to give a university seminar.
Put simply, he believes economy has been awash with credit and the reckoning is nigh. Those, like Mr Brown, putting their hopes on Britain being a special case are sorely wrong. Lack of supply, rising demand, bureaucratic planning, and rich Russian oligarchs do not explain the extraordinary boom in house prices. Just like America, this little island is due for a correction. Ominous signs emerging: Mr Cable said he recently met his first constituent in Twickenham with negative equity. "The house of Gordon has been built on a flood plain and the waters are now seeping in," he bleakly said.
Whilst it is always refreshing, if a little perturbing, to hear politicians talk down the value of most voters’ most cherished asset, we have heard this from Mr Cable before. What made today different was his call for a "safety net". Peter Lilley removed state support for arrears during the last Tory government, Mr Cable said, leaving borrowers with no protection. The government must step in and and bang heads together with the mortgage lenders to set up a bank repossession operation that aims to keep most families in their homes. That made me a bit happier about the prospect of becoming a homeowner. But not much.
