Industry | 2010.03.21
Treasury calls in Vince Cable for talks on implications of a hung parliament
• Liberal Democrat \'ready to be chancellor\'
• Whitehall mandarins prepare for coalition
Vince Cable has held unprecedented and detailed talks with the top official at the Treasury about the Liberal Democrats\' economic policies – and declared himself willing to serve as chancellor after the next election.
As Whitehall gears up for a possible hung parliament, Cable told the Observer that he had been questioned by Nicholas Macpherson, the Treasury\'s permanent secretary, about what the Lib Dems\' demands would be in a coalition with Labour or the Tories.
Cable was unaware of such meetings having taken place with Lib Dem shadow chancellors before previous general elections. The talks were a sign that the Treasury was "taking seriously" the prospect of his party playing a leading role in economic policy in what could be the first hung parliament since 1974.
"He wanted to know what we attached priority to. He wanted to know what we felt strongly about," Cable said, adding that his ideas on tax and spending were well received. He didn\'t say to me: \'Yes, minister, but you can\'t do that\'."
Cable, whose credibility has grown throughout the economic crisis, made clear that, if he was to be offered the chancellorship in a hung parliament, he would jump at the chance. He did not want to be "the most unpopular person in Britain" as public spending is slashed, he said, but added: "I wouldn\'t be in this business if I wasn\'t willing to take the responsibility if it was to come my way."
It comes as two more opinion polls point to a hung parliament. An ICM survey for the News of the World puts the Tories six points ahead on 38%, and research by YouGov for the Sunday Times suggested the party enjoyed a seven-point advantage.
David Cameron and his shadow cabinet have already held talks with senior Whitehall mandarins in preparation for a likely handover of power. But talks with a third party take place only where there is a serious prospect of it holding the balance of power.
Downing Street and the Treasury said Alistair Darling would present a "budget for growth" on Wednesday, portraying Labour as the party to nurse the economy back to health, with investment in jobs and industry, and warning that the Conservatives would jeopardise that with premature spending cuts.
The chancellor has little room for manoeuvre in pre-election giveaways, but one idea being seriously considered is to delay a 3p rise in petrol duty. Darling will announce a £1bn green infrastructure fund to invest in low-carbon technology and extend job schemes to help unemployed young people into work.
While the deficit is expected to be as much as £10bn below the £178bn forecast in his December pre-budget report, the Treasury stresses the focus will be on the chancellor\'s commitment to halve the deficit within four years. "It\'s a boring budget," said a No 10 source. "He may extend the odd payment here and there, but it is about stability and jobs."
In his weekly podcast, Gordon Brown states today that the recovery remains "fragile and in its infancy". The prime minister says that Labour\'s commitment to cut the deficit is "non-negotiable", but stresses that investing in jobs and programmes for industry is a way to reduce it in the medium term.
"It means not taking away the extra support too soon, which risks setting back the recovery and tipping us back into recession… If we allow unemployment to run riot, as happened in previous recessions, that will cost us more and add to the deficit," he says.
Cable made clear he would have serious reservations about working with either Labour or the Conservatives. "I\'m worried about both," he said. "If either of them came back, Gordon, given his history, will be in denial about difficult decisions, and the Tories are in danger of doing foolish, precipitate things that could make the situation a lot worse."
Cable was noticeably more critical of the Conservatives\' response to the financial crisis, saying that they should score "nul points" for failing to grasp the seriousness of the situation. "They haven\'t done anything to attract praise, because they completely and totally misunderstood the problems."
By contrast, Labour had had a "purple passage" in the autumn of 2008, when Brown led international efforts to recapitalise the banking sector after the collapse of Lehman Brothers.
The Conservatives sought to seize the initiative on reforming the bloated financial sector this weekend, promising to implement a US-style tax on banks if they win the general election, instead of waiting for an international consensus to emerge, as Labour has promised to do. Cameron spelled out the measure in a speech about taking on the "vested interests" in society, comparing the battle to constrain the banks today with Margaret Thatcher\'s attack on union powers in the 1980s.
Lord Myners, the City minister, said: "This ill-thought-out Tory briefing has all the hallmarks of a plan made up on the hoof."
For more information, please visit
http://www.guardian.co.uk/politics/2010/[...]ry-vince-cable-hung-parliament
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