Vince Cable goes to war against capitalism

By staff

Vince Cable has offered a stark warning to the financial sector, promising tough government action against “the murky world of corporate behaviour”.

In a sign that the business secretary feels the need to calm Liberal Democrat jitters over the deficit reduction plan, he spent his key note speech to the party conference making threatening noises towards speculative investors and City fat cats.

“Capitalism takes no prisoners and kills competition where it can,” he told conference this afternoon.

Comment: Cable is right about capitalism

“The principle of responsible ownership should apply across the business world. Let me be quite clear. The government’s agenda, is not one of laissez-faire.

“Markets are often irrational or rigged. So I am shining a harsh light into the murky world of corporate behaviour.

“Why should good companies be destroyed by short term investors looking for a speculative killing, while their accomplices in the City make fat fees? Why do directors forget their wider duties when a fat cheque is waved before them?”

The tough rhetoric of the speech instantly made the Tories nervous. Nick Clegg and Dr Cable have spent the week in Liverpool promising tough action against tax avoiders and evaders and bankers’ bonuses.

Those views would traditionally be anathema to the Conservatives, but party officials know the pressures the Lib Dems are under to prove the deficit reduction plan will not involve a return to the Thatcherite economics of the 1980’s.

Equivalent attacks on the rich are an essential way to ensure that George Osborne’s promise that “we’re all in it together” does not sound empty once spending cuts begin.

They also help dispel the notion that the cuts come as part of an ideological drive from the Conservatives which would have taken place regardless of the deficit.

But that did not stop chancellor George Osborne calling Dr Cable today to confirm that he would be delivering such a colourful, dramatic speech.

The business community reacted angrily to the speech when it was trailed to the media late yesterday.

Digby Jones, former head of the Confederation of British Industry (CBI), told the Today programme: “He is the business secretary. If he wants to be a Liberal MP, go to conference, and have the whinge that they’ve had every year, fine.

“But you can’t be the secretary of state for business and then behave as if you’re just the campaigning Liberal he always has been.”

There was little support from the unions either. RMT general secretary Bob Crow accused the business secretary of “underestimating the intelligence” of the electorate.

“On the one hand he says that he will try and control unfettered capitalism but on the other hand his government is implementing cuts that will hit the poorest hardest while leaving the bankers and speculators who created this crisis unscathed,” he said.

“Whatever way Vince Cable and Nick Clegg try and dress it up they are merely bag carriers and apologists for the most right wing and reactionary government in a generation which will unleash misery the length and breadth of the country as the austerity cuts hit home.”

Labour was equally scathing, with shadow business secretary Pat McFadden saying he was “bashing the banks”.

He said: “Vince Cable knows how to get a cheer from the hall. But his attempt at being in opposition and in government at the same time can’t go on forever.

“As he bashes banks and capitalism the real test will be whether growth returns and business gets the support it needs from the finance sector. On that he’ll need more than warm words.”

Dr Cable was quick to bat away accusations of Marxism while appearing on the Today programme this morning.

“It will be a pro-market, pro-competition speech,” he said.

“Capitalism, if it’s going to work properly, has got to be competitive … This recovery is going to happen through private enterprise. In particular, it’s going to happen through very large numbers of small companies expanding.”

Laughing off the criticisms at the beginning of the speech itself, Dr Cable began with “Good afternoon, comrades… I have received a fattwa from the revolutionary guards of the trade unions, I’ve alarmed the Daily Telegraph with a progressive graduate payment, and I’ve upset some very rich people who are trying to dodge British taxes.

“I’ve concluded on the strength of that, that I must be doing something right.”

Dr Cable went out of his way to convince supporters that the deficit reduction plan is the only option available to the government.

“We know that if elected Labour planned to raise VAT,” he said.

“They planned to chop my department’s budget by 20 to 25%, but now they oppose every cut, ranting with synthetic rage, and refuse, point blank, to set out their alternatives.

“They demand a plan B but don’t have a plan A. The only tough choice they will face is which Miliband,” he added.

“A proper debate is impossible with people who start from the infantile proposition that there isn’t a problem; and simply hark back to a failed world of ‘business as usual’.”

Dr Cable’s speech came on the last day of the Lib Dem conference in Liverpool.