Leaked Cable letter reveals crisis of confidence in coalition

By Ian Dunt

A leaked letter from Vince Cable reveals the business secretary has severe doubts about the government's performance.

The letter, obtained by the BBC but also previously highlighted by the FT , sees him ask what the government's "vision" for the country is.

"I sense there is something important missing," he writes.

"A compelling vision of where the country is heading beyond sorting out the fiscal mess."

He also steps well outside the government line with a call for RBS to be split up.

"My suggestion is that we recognise that RBS will not return to the market in its current shape and use its time as ward of state to carve out of it a British business bank with a clean balance sheet and a mandate to expand lending rapidly to sound business," the business secretary wrote.

The development will pile pressure on the already embattled minister, who was previously in trouble for telling undercover reporters he was prepared to take the "nuclear option" of resigning if he had to.

It is also unlikely to win him any further friends on the Tory backbenches, many of whom have already called for the Department of Business to be folded up.

Chuka Umunna MP, shadow business secretary, said: “This letter sadly underlines the extent to which the Department of Business lacks clout and has become marginalised compared to the days when Peter Mandelson was in charge.

“It is becoming increasingly clear that David Cameron and George Osbrone have become roadblocks to the modernisation and reform needed to create a more productive economy. If they were doing all the things the letter talks about to promote growth, there would have been no need for the letter to be sent in the first place." 

The letter's emergence is particularly damaging because it plays directly into the criticisms of the government made by its opponents – namely that it has no purpose beyond eradicating the deficit.

Critics of David Cameron's 'big society' agenda in particular have often claimed it is an attempt to pretend the government has a more positive role to play rather than just fixing the nation's finances.