The charge: that Vince Cable has been deliberately talking empty anti-capitalist rhetoric, rather than implementing practical policies, to please the audience at the conference so that he can distract them from the party’s alleged failure to meet the expectations of the people who voted for them.
The Liberal Democrat conference was always going to be an uneasy affair this year, and it was always likely that left-wing rhetoric, in some form or another, would be dropped into the mix. The bankers are not a controversial group to attack, and by calling them ‘spivs’, whilst calling for greater regulation, he got the not entirely unjustified applause he sought.
None of this is anything other than predictable. More strange is Vince Cable’s choice of language about capitalism itself: i.e., that it “kills competition.”
Of course, capitalism without true meritocracy, which is what the banks have been enjoying, does kill competition. It is surely as much of an aspiration-killer to reward failure as it is to fail to reward success. But capitalism in itself cannot possibly kill competition.
This was not what Vince Cable meant. His principles about what makes good business management are actually very clear. He praises companies like Vauxhall and John Lewis for “forward thinking,” for keeping their training programmes going during the recession, for respecting both their staff and their customers equally, and – crucially – for working alongside the unions.
Vince Cable is, in fact, more genuinely pro-capitalist and pro-business than many in the Conservative party. He certainly denies holding any principles of socialism quite vociferously. He used the reference to ‘capitalism’ in the speech for the same reason he released a ‘teaser’ to the press before giving it: he wanted to make himself seem tough on the injustices in our financial system, and win the approval of disgruntled Liberal Democrat supporters.
So, do those disgruntled Lib Dems have a point?
The charge against Cable is twofold. The first charge is whether his policies hold up to scrutiny. The second is whether he has a legitimate electoral mandate for them.
The Coalition’s handling of the economic crisis has been fairly mixed. The ‘bonus levy,’ for example, has been criticised by the International Monetary Fund as much too low, and hiring the tax avoider Philip Green to advise them, as well as the reappointments of Stephen Green and Bob Diamond, have all also attracted criticisms. On the other hand, Cable actually insists that in spite of the IMF’s comments, the bonus levy is “higher than anywhere in the western world,” and points out the fairly widespread support for his plan to separate out the ‘casino’ corporate banks from the retail banks, a policy which is backed by experts like Mervyn King.
The second charge against Cable and his party is the perhaps more fundamental one that they have campaigned on one set of promises, then used the votes garnered to help another party implement something very different. Irrelevant to such complaints are the claims that the cuts necessary to fix the deficit, or that Cable’s approach is the correct one, because the question is one of electoral accountability, not economic policy.
The main offending financial policies are these: a VAT rise of 20% (which will not only hit the poorest disproportionately but is a ‘tax on spending’ just as the Labour National Insurance Tax rise was essentially a ‘tax on jobs’), cuts to Housing Benefits and threats of cuts to those on Unemployment Benefit, the axing of the UK Film Council, further restrictions (because there are already quite strict ones in place) on eligibility for Disability Living Allowance (a work supplement, of course, not a full-time benefit), and, of course, non-economic policies which have knock-on economic effects, like the cap on immigration which may hurt businesses reliant on outside talent, according to Boris Johnson, (not to mention those reliant on flexible low-cost labour), and cuts to the ‘Schools for the Future’ programme which Labour leader Ed Miliband says will “devastate” the UK construction industry.
These are all being pushed through by the Coalition, and they are given credibilty by Cable’s support. (“You’re an expert in this [economics], aren’t you?” Jeremy Paxman once said to Cable during an interview, without even a shadow of a sneer on his lips. “Everyone knows it.”) Crucially, the Conservatives were unable convince the electorate of the argument for these policies in their election camaign: they did not win a parliamentary majority. Their democratic mandate, under our current system (a system championed by the Conservatives), is based on the assumption that Liberal Democrat voters now back them just because the Lib Dem party leadership does. But 40% of Liberal Democrat voters say they would have voted differently if they’d known what the electoral outcome would be.
So have the voters been mislead? And would they have got what they wanted under a minority Tory government (or indeed a Labour one), with the Liberal Democrats in opposition?
Liberal Democrat voters unhappy with the electoral mandate of the Coalition can’t seriously believe that the government should adopt more Lib Dem manifesto pledges. If the Conservative party failed to get a mandate, the Liberal Democrats failed even more spectacularly. They have 8% of the seats in Parliament; 23% of the vote.Nick Clegg was absolutely correct when he said that David Cameron had the greatest mandate to lead. He would have been a shameful spokesperson for democracy indeed if he had supported anyone else.
Whether the Liberal Democrats best served their voters by joining the Coalition themselves is less certain. David Cameron could have tried to form a minority government, and the Liberal Democrats could have formed a parliamentary alliance with Labour, and other parties, giving a powerful opposition voice to the nastier of the cuts (such as Disability Living Allowance), whilst still allowing the government to get on with making reasonable cuts (such as the Housing Benefit cap, and cuts to government arts spending), and implement their management of the economic crisis.
Would that have been better ‘value for votes’ for Liberal Democrat supporters? Wouldn’t the parliamentary party have been able to block the badly-timed cuts to Inheritance Tax, and the illiberal piece of social engineering in the form of tax breaks for married people, from the benches? Wouldn’t they have been able to vote down the VAT rise, put forward proposals for genine electoral reform – perhaps with Labour’s support – and thus do much more for their own voters by being in opposition than by being in government?
Yet had they done so Vince Cable’s plans to separate corporate banking from retail banking, his respect for both unions and the bosses, his refreshing economic literacy, would all be absent from government.
So we end up with a curious contradiction. The Liberal Democrats are over-represented in government, yet a significant number of their voters say they don’t feel the benefit. The wider electorate did not vote Liberal Democrat, yet they may benefit from Vince Cable’s talent.
To whom do they owe the more pressing democratic responsibility: their own voters, or the country itself? A complicated democratic paradox all of its own. Their answer seems to be to the country itself.
Verdict? Innocent on the first charge; guilty on the second.