Transcript of Vince Cable Interview

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James Landale interviewed Business Secretary Vince Cable.

JAMES LANDALE:

So a second bailout for Greece has been agreed. The Eurozone and the markets can breathe a sigh of relief. Or can they? As economists pore over the detail, questions remain over whether the deal agreed in Brussels is just a temporary sticking plaster or a sustainable answer to the Euro's woes. But Britain is not in the Eurozone, but its economy is utterly intertwined, so what does it mean for us? The Business Secretary Vince Cable is here. Welcome. Good morning, Mr Cable. Answer that first question: has the deal that's been agreed this week, is it a sticking plaster for the short-term or is it a sustainable solution for the long-term?

VINCE CABLE:

Well it hasn't solved the big problems, but it was a big step forward. I mean essentially what they've agreed is that some of the Greek debt will be written off - the banks (amongst others) will absorb the cost of that. They've agreed to a bigger package of measures for future difficulties and they've taken a key step forward in accepting closer economic union. So I mean the irony of the situation at the moment, you know looking to markets opening tomorrow morning, is that the biggest threat to the world financial system comes from a few right wing nutters in the American Congress rather than the Eurozone. So it is a temporary set of measures. More will have to be done, but it is a step forward, a real step forward.

JAMES LANDALE:

But is it enough?

VINCE CABLE:

Well, as I said, you know the issue of Greek debt, they've grasped the principle of debt reduction. I think most people would argue that probably more needs to be done on that front, and they've just begun to take the first steps to accepting that there's going to have to be much closer economic integration in Europe.

JAMES LANDALE:

So does it need more structural change? Do the fundamental sort of question marks about the existence of the Euro still need to be answered?

VINCE CABLE:

Well I think those people are frankly rather irresponsible people who were sort of rubbing their hands with glee at the prospect that the Eurozone would collapse and being confounded, and there has been a political will to deal with the issue. And it's very much in Britain's interests, as the Chancellor pointed out during the week, that the Eurozone succeeds, and they've taken I think a few key steps to make sure that it does succeed. Of course we're not part of it, we're not likely to be a part of it in the near future, but I think it's very important for our economy - both in terms of our trade and the stability of our banks - that it does succeed, and we want them to succeed.

JAMES LANDALE:

Now here in the UK we have the latest growth figures out this week. You spend a lot of your time touring the country. Give us your sense of the state of the economy now. I mean how concerned are you about the state of growth?

VINCE CABLE:

Well it isn't great. And it's not surprising that it's not great because of the problems we inherited - you know the aftermath of the banking collapse, the recession, the unsustainable boom, the fact that we've got to put the public finances in order, the external difficulties in Europe and elsewhere. These are not easy problems. I think what is happening is I think first of all there is confidence in the UK economy. We're in a German rather than a Greek position in international financial markets, which is very positive and keeps our debt service costs down, and we're also beginning to see real evidence of rebalancing. I travel around the country a lot, as you see, and you know the car industry, the aerospace industry and so on, you see real private sector investment taking place, you see the beginnings of a rebirth of manufacturing and exports. It's not on a massive scale, but it is happening.

JAMES LANDALE:

But the growth isn't there yet, is it?

VINCE CABLE:

There is a genuine problem with demand, with consumer demand. And again it's not surprising - there have been big shocks; world commodity prices going up has had a big effect on consumer confidence here. But the Bank of England, which has played an absolutely key role in keeping interest rates down and if necessary using the expansion of money supply to deal with this problem, is in reserve if weak demand continues.

JAMES LANDALE:

So you think that a little bit more quantitative easing, a little bit more printing of money - that could be one of the solutions to tide us over this lack of growth?

VINCE CABLE:

Well the Bank of England's an independent body. I think we need to stress that. They need to make their own judgments about this. But if there is a sustained period of weakness of demand, the right approach to that is not for the government to relax its fiscal discipline - we have to keep that going - but it is about the Bank of England pursuing policies of low interest rates, which also help keep our exchange rate down and therefore help exports, but also using expansion of quantitative easing - perhaps in more imaginative ways, not just acquiring government securities. But it's for them to form a judgment on what and when that happens.

JAMES LANDALE:

What do you mean more imaginative ways?

VINCE CABLE:

Well there are members of the Monetary Policy Committee that have floated different ideas about how you do quantitative easing. We get into very technical issues here, but it's for them to form their own judgment. But I think that if we have a problem, a continuing problem of weak demand, that's the way to deal with it.

JAMES LANDALE:

But if we get low growth figures or no growth figures this week, you won't be blaming the bank holiday at the Royal Wedding and things like that?

VINCE CABLE:

No I won't because I think we do realise that it is difficult. I think the official word is 'choppy' …

JAMES LANDALE:

Yuh, okay.

VINCE CABLE:

… but there are weaknesses which we've inherited and which we realise are very deep-rooted. The problem we have is not simply getting growth started again, but it's getting started in a sustainable way, and it's got to come through business investment, it's got to come through exports, manufacturing, and we're putting in place policies to make sure that happens.

JAMES LANDALE:

Turning to the phone hacking crisis, you used to be responsible for media ownership rules. These are obviously going to be looked at again by the Levinson Inquiry. What would you like to see?

VINCE CABLE:

Well I'd say it depends partly what the judge led inquiry comes up with, but I think we have learnt from the past that having media moguls dominating the British media is deeply unhelpful not simply in terms of plurality but because of the wider impact on the political world. Certainly what I want to see is a set of very clear, unambiguous rules. The rules at the moment are very unclear what plurality means. Clear, unambiguous rules about market shares - that they don't have dominant players; a presumption …

JAMES LANDALE:

(over) So limits, thresholds?

VINCE CABLE:

Yes. And a presumption against cross-ownership between the press and television.

JAMES LANDALE:

Some would say look Rupert Murdoch brought plurality to this country by having television and newspapers, and without him we would have had fewer newspapers. The Times may not have existed; the Independent might not have been created.

VINCE CABLE:

I think probably a balanced historical view would say that he has made positive contributions. I don't want to detract from that. But we're dealing with the world as it actually is where we've had a very, very dominant media company and I think we need to draw the lessons from it. Not in any kind of personalised way, but simply in terms of the structure … We need diversity, we need plurality, we need choice, and it's got to come from wider ownership.

JAMES LANDALE:

So Rupert Murdoch's dominance will never happen again?

VINCE CABLE:

Well if we get the rules … It isn't simply an issue of Rupert Murdoch. You know there are other big media companies who could have the same influence in future and we've got to stop that happening.

JAMES LANDALE:

You've just heard what Sir Hugh Orde said about his view of the Metropolitan Police at the moment. Are you satisfied with what's going on? I mean you know you've been very critical of you know the sleazy links you've described between the media and the police, between … You know the corruption, which is a word that's now being used by yourself, by the Prime Minister about what's gone on in the Met.

VINCE CABLE:

Well I'm certainly very worried about it because I think, like most people out there, I have tremendous respect for the police. And you know the vast majority of police officers are completely honest and feel you know anger, I think, about the way they've been let down by people higher up the system. So there does need to be a proper independent investigation, so that you know if there are bad apples they do need to be removed from the barrel.

JAMES LANDALE:

Now you famously told the Telegraph undercover reporters, "I have declared war on Mr Murdoch. I think we're going to win." Have you won?

VINCE CABLE:

I don't … I don't see it like that actually. I did one good thing when I had responsibility for that problem, which was I did make sure that the bid was referred to an independent regulator. There was a lot of advice just to let it through and if that had happened it would now be a fait accompli, but it did go to the regulator. As a result it was stopped, and as a result we're in a much healthier position today.

JAMES LANDALE:

Lots of reports this weekend about members of the Liberal Democrats being bullied by News International staff. Is that something you recognise, something you experienced?

VINCE CABLE:

Well there was - I don't know how to describe it - heavy lobbying, but perfectly legal. I mean nobody's suggesting that anything illegal happened on that front. But I don't want to dwell on the past and my own role in it. What I do want to focus on is reforming the system of competition and takeovers as it applies to the media, so we have a healthier and more plural system in future.

JAMES LANDALE:

Finally, do you believe that News International as a news corporation are a fit and proper organisation - for example to own its existing stock of BSkyB?

VINCE CABLE:

Well certainly that's a big question to ask in view of what's happened, but it's not … fortunately it's not for politicians to come to a definitive judgement on that; it's for the regulator. The regulator, as I understand it, Ofcom, is now looking at whether they are fit and proper persons to continue to have their share in ownership and they're the people who will come to a decision, not me.

JAMES LANDALE:

But wouldn't you just prefer it if Rupert Murdoch just pitched his tent and left?

VINCE CABLE:

No, I'm not personalising it. We've got a process now. They've got to look at that question of fit and proper person and you know we'll wait and see what happens.

JAMES LANDALE:

Excellent. Well Vince Cable, thank you very much indeed for joining us.

VINCE CABLE:

Thank you.

JAMES LANDALE:

I think you've defined a new phrase: heavy lobbying. (Cable laughs) There'll be lots of discussion about what exactly that means now.

INTERVIEW ENDS

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