Vince Cable paints grim economic picture in wake of General Election
August 31, 2009 12:00 AM
Dr Vince Cable, Liberal Democrat Shadow Chancellor, predicted hard decisions ahead for any Government in the New Year as Government borrowing continues and real term cuts of 10% in spending become necessary. Dr Cable was speaking at a dinner for northern businessmen in Lybster organized by local MP and Lib Dem Shadow Business Secretary, John Thurso.
Dr Cable spoke at length on the causes of the current economic crisis and its ramifications. In a vivid metaphor he compared the banks during the glory days to sausage manufacturers - taking the ingredients of their sausages from a myriad of different sources, many of them highly dubious. Expanding on that metaphor he asked the audience to imagine what would happen when it was found that BSE had contaminated those very profitable sausages…
In his talk Dr Cable was broadly supportive of the Government's bail-out of the banks but was highly critical of its lack of decisiveness and of its failure to reign in the bonus culture in the city that undoubtedly contributed to the banking collapse. He was also highly sceptical of Government and bankers' suggestions that there would be a wholesale flight of financial businesses and talent if remuneration was capped in any way.
Although earlier parts of Dr Cable's talk covered familiar themes - it was in the Q and A section at the end of the talk that some of the most disturbing consequences of the crisis were dealt with. The unprecedented nature of the economic crisis, the astronomical levels of Government borrowing (of which he approves) and the possible knock on effects of quantitative easing, all mean that any new Government will be dealing with a national crisis in the wake of the election and having a mandate will be crucial.
Dr Cable was insistent that any new Government would desperately need the backbone, foresight and theoretical frame work to deal with this crisis. Unfortunately, and be this observation party political or not, he felt Labour had manifestly proved it had neither of those qualities nor the framework. He was also deeply concerned with the complete lack of experience of Cameron and Osbourne in running anything at all.
For his part, Dr Cable felt that the crisis heralded the end of the state looking after people from "cradle to grave." He emphasized the need to reduce red tape and invest in innovation and training in order to stimulate business and develop products on a variety of scales. He dwelt on the unsustainability of 50% of people attending university and the need for more training and trades for them. Perhaps most emphatically he called for a return of power to the appropriate level so that the 10% all round cuts that were necessary would come where most appropriate and not hit the most vulnerable and not be forced upon our communities as a whole.
All in all it was a fascinating discussion and Vince was warmly thanked by Cllr Robbie Rowantree and MSP Jamie Stone.
Report by Sam Kent.
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