Vince Cable’s speech to Lib Dem conference was just about on-message as regard to the coalition’s economic strategy. We need the state, he said; we need a demand stimulus, he said; we are taking advantage of low interest rates and borrowing more, he said. But he didn’t quite call for more borrowing for an immediate fiscal boost.
In fact, any Lib Dem wanting to call for a departure from George Osborne’s Plan A will now find it very difficult to do so after the party conference voted overwhelmingly in favour of the current fiscal plan.
This morning, delegates were asked to vote for a motion backing the “difficult decisions taken by the coalition government” and calling for the government to “do everything possible to stimulate growth within its fiscal mandate” (emphasis mine). Read more
Two text message exchanges stand out from this morning’s Leveson testimony by Jeremy Hunt, both sent on the day we found out that Vince Cable had told undercover reporters he had “declared war on Murdoch”.
The first was one sent by the culture secretary to James Murdoch. Referring to the European Commission’s decision to let the News Corp’s bid for BSkyB proceed, Hunt texted Murdoch:
Congrats on Brussels. Only Ofcom to go.
Vince Cable has reignited one of the questions that has dogged the coalition since it formed: when will it split up? Talking to BBC 5 Live’s John Pienaar, the business secretary said:
Everybody involved knows that before the next general election the two parties will have to establish their own separate platforms and identity.
But how that disengagement takes place, over what time period is very much an issue for the future, certainly not something we’re talking about at the moment.
The question is, what exactly does Cable mean by “disengagement”? Read more
After a couple of questions on Afghanistan, following the news that six British soldiers are presumed dead, Ed Miliband turned his attention to more domestic, and combative topics: specifically welfare.
What would the prime minister say, asked the Labour leader, to Tim Howells, a man from Dartford with a wife and three children, who faces losing his working tax credits when the minimum number of hours that must be worked to claim them rises from 16 hours to 24?
David Cameron had a reply: the 24-hour threshold was for couples, meaning each one only has to work 12 hours.
The problem is, replied Miliband, that his wife spends her time looking after the couple’s three children. And Howells simply can’t find the extra hours the government is asking him to do.
Cameron effectively acknowledged the unfairness, but was able to turn it to his own advantage: Read more
Sitting in the Commons chamber for business questions today, I was startled to hear an apparently frank admission from Vince Cable to a question from Gordon Banks, the shadow business minister.
Other ministers (including the chancellor) have insisted that Project Merlin, the deal between the government and the banks to increase gross lending to businesses, has been a success. But Cable apparently disagreed.
Here is the full exchange: Read more
Vince Cable will not be outflanked by George Osborne. Osborne said on Tuesday that banks needed to show restraint when paying bonuses – an unusually anti-City message for a Tory chancellor.
But Cable today has gone one further, urging investors not to focus only on banks, but to make sure that no big company allows its executives to be paid too much. We will have more on this in tomorrow’s FT, but here is the letter he has sent to top investors and FTSE100 chairmen: Read more
We revealed earlier this month that George Osborne was considering slashing the benefits bill by linking them to earnings (which are stagnant), rather than inflation (which is rising fast).
Since then, the chancellor has been locked in a battle, not only with Nick Clegg, but also Iain Duncan Smith, the Tory work and pensions secretary, about whether the government should do this, having previously said benefits would rise in line with CPI.
If Vince Cable is to be believed, it looks like IDS and his Lib Dem allies have won this one. The business secretary told the BBC’s Politics Show: Read more
We reported last week that George Osborne and Vince Cable were pushing for a new toll road scheme on the heavily congested A14 near Cambridge. Today, the Sunday Times suggests that road tolling will play a central role in the government’s growth review on November 29.
The paper says Osborne and Cable want £50bn from the private sector, mainly pension funds and insurance companies, to fund new infrastructure, including roads, homes and power stations. In return they will get a share of tolls, rents and energy bills.
The problem is that ministers can’t force private companies to spend their money on such schemes: all they can do is put the incentives in place for them to do so. But these carry their own risks. Read more
The process by which companies apply for grants from the regional growth fund is not desperately transparent. As I wrote on this blog, we don’t know the details or the sums awarded to over a hundred companies yesterday.
And questions are already being raised about how money was allocated to Sheffield Forgemasters (near Nick Clegg’s constituency), JCB (run by a Tory donor) and a company part-owned by Jon Moulton.
What we don’t know in detail is the arguments being put forward by councils and companies which have clinched the final decisions.
Sunny Hundal, founder of the Liberal Conspiracy website, has sent out a bundle of FOI requests to get hold of some of this correspondence. Out of 50 applicants, however, only six have provided the information.
What he received is interesting as it suggests a large degree of arm-twisting by some companies.
For example CQME, a Chinese technology company, has suggested it could make its British subsidiary, Holroyd Precision, the base for its European headquarters.
But if the Rochdale company did not get a £2.8m grant from the RGF, it wrote, this could damage its expansion in this country.
“Without RGF support, the project will not go ahead in the UK as it leaves us with a shortfall of £2.82 million having taken
For weeks there have been rumbling tensions about the implementation of the Vickers reforms after the FT first revealed that they may not be completed until as late as 2019.
We splashed this morning on how there will indeed be no major restructuring until after the 2015 general election – after Vince Cable accepted that it would be impossible to implement such major reforms before then. (Although the legal framework will be put in place during this Parliament.)
This would reinforce the Treasury’s insistence all along that there was no major Tory-Lib Dem split over the issue.
So who was responsible for creating the impression that the Lib Dems were adamant on immediate reforms to the banking sector to split retail from investment activities?
Step forward Lord Oakeshott, former Treasury spokesman for the party in the upper chamber, who said in the Evening Standard a few weeks ago:
“What would not be acceptable is for Vickers to come out with a radical solution and then the government not to implement it immediately and in full…Every Liberal Democrat from top to bottom is united about that. It will be absolutely critical – a Lib-Dem red line, bottom line, sine qua non – whatever you want to call it. That will be crunch time for the Coalition. If the Vickers Report is kicked into the long grass, it will be curtains for the Coalition.“
In mid-August Oakeshott was interviewed again, this time by the FT, where he made the same point again:
Can anyone in the Treasury or the banks seriously suggest we kick Vickers’ reforms into the long grass until 2019? When Vickers reports, our
We’ve already reported the cabinet row ahead of Monday’s decision over carbon targets, with Vince Cable among those warning about the implications on Britain’s economic competitiveness.
David Cameron and George Osborne have a complex decision to make in weighing up their promise to be “the greenest government ever” and their desperate need to get the economy on track again.
And now Ed Miliband has weighed in, saying he is “dismayed at the news that the recommendations (from the committee on climate change) may be watered down.
I’ve seen a letter that the leader of the opposition is about to send to the prime minister, suggesting that any such dilution would mark an end to the cross-party consensus on climate change. Read more