Transcript of Vince Cable Interview

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THE ANDREW MARR SHOW

INTERVIEW:

VINCE CABLE, MP

BUSINESS SECRETARY

DECEMBER 18th 2011

ANDREW MARR:

Last week the Leader of the Liberal Democrats made it very clear in the studio that he did not see entirely eye to eye with the Leader of the Conservative Party on Europe, and this weekend the papers make much of the fact that the two coalition partners don't agree on tax breaks for married couples. Once upon a time different views in the same government got headlines about gaffs and splits. Now, in the coalition, the two sides boast about them. Well Vince Cable is Business Secretary and of course a key player in the current crisis. Welcome. Could we just get a little … a few things clear. At any point in this crisis over the veto and so on, did you contemplate resignation?

VINCE CABLE:

No. I mean you know I frequently wonder about my position in government because we're all making difficult decisions, but when I reflect on it - as I do - I realise that what we're committed to is actually making this government work. We've got to deal with the very serious problems in the economy. We're working with another party, we have a lot of disagreements with them - I'm a somewhat left of centre Social Democratic - but that's secondary to the fact that we've got to work together to solve this massive economic crisis, and that's why I'm in government and why I'm staying in it.

ANDREW MARR:

And was it clear in your mind that the veto might have to be exercised? Did you know what was going to happen beforehand or what was likely to happen?

VINCE CABLE:

No, the issues that were posed - which were about reform of the financial services sector - were actually not fundamental at all to the future of the European Union, which is essentially about the Eurozone. I mean the views I expressed at the time was that what we should be focusing on is rebalancing our own economy - and financial service is of course part of it; that what we need to do is to shift the British economy to manufacturing, creative services. And our own financial services sector needs reform. I mean our big banks were at the very centre of the financial crisis - what the Europeans call you know Anglo Saxon financial capitalism - and it needs reform. And that's why tomorrow you know the government is going to launch this initiative on the banks, accepting in full the Vickers Commission. We're going to proceed with the separation of the banks, the casinos and the retail business lending parts of the banks - something I and the Liberal Democrats have pushed for for a long time. That's now going to happen.

ANDREW MARR:

So all that angry heckling from some of the key banks saying you can't split us up, you'll destroy us, you'll damage us - that has failed?

VINCE CABLE:

Yes it has. And I'm working together with the Chancellor on this. We've come to a common view. We're going to proceed with it and, moreover, we're going to get on with it. I mean the legislation, the primary legislation is going to be completed within this parliament. It's got to be done. We can't have a position where the big banks are too big to fail, where there's a taxpayer subsidy, so we're going to deal with that problem.

ANDREW MARR:

And so we're going to see the splitting up of the banks announced tomorrow. The Chancellor himself was worried about this at one point, I recall. He wasn't sure about it. But he's changed his position on that?

VINCE CABLE:

Well we've treated this as a joint exercise. The Chancellor and I set up this commission originally, worked together on it, and we've come to a common view and we've accepted the recommendations of the commission. It's absolutely right that we make the British economy safe. We just cannot risk having a repetition of that financial catastrophe that we had three years ago.

ANDREW MARR:

This suggests one reason why you might not have wanted to resign over the other issue, I can see that, if you're …

VINCE CABLE:

(over) No, it's a good result. And I do reflect on the fact that within this government I and my Liberal Democrat colleagues have achieved a whole series of very positive things.

ANDREW MARR:

And this is one of them?

VINCE CABLE:

It is. You know we're lifting low earners out of tax, protecting the state pension, the pupil premium, and big structural reform of the banks was something we fought for and argued for and now it's going to happen.

ANDREW MARR:

Even Boris Johnson conceded or suggested that the use of the British veto - which he was in favour of, strongly in favour of - hadn't actually put the City in a stronger position or British financial services in a more protected position. Is that what you think too?

VINCE CABLE:

That's correct and Boris Johnson was right. As a matter of fact, the position is unchanged and …

ANDREW MARR:

So what was it all about then, do you think?

VINCE CABLE:

Well it was largely political - certainly the Prime Minister's got a sort of short-term boost from it - but it doesn't actually deal with the big, long-term fundamental problems in Europe.

ANDREW MARR:

So you've had to swallow a piece of Conservative Party politics, in your view, which was you know high risk in some respects and which hasn't won this country anything? That is a fair assessment of what you think?

VINCE CABLE:

Yes, we need to focus on the big long-term issues. There's the problem of the Eurozone. It is still there, it's still in a critical situation. We need to … You know we're not members of it, we can't tell them what to do, but they've got to make the fundamental reforms to get stability and also get back growth. That's absolutely top priority. And we need to work within the European Union. We've got to get back on track to working with them. Because if I and my colleagues are going to continue to attract inward investment from overseas - you know particularly from the big Asian countries - they see Britain as a gateway to Europe. They don't want any doubts cast upon that. And I think the other point which has been lost sight of, we're in a very, very dangerous economic position - much worse than throughout the whole half century of the European Union - and what the European Union has put in place is a series of rules to prevent nationalism, protectionism, we've got rules on competition state aids. It's so tempting at a time of crisis to break those, and so that's why the union is so crucial and we've got to strengthen it.

ANDREW MARR:

Nonetheless, in the year ahead we're going to see some countries falling out of the Euro, aren't we?

VINCE CABLE:

I don't think that's necessary. It's certainly something we should try to avoid. I think there's a two-stage problem within Europe. One is actually preventing large-scale default in Southern Europe and the Germans in particular have got to get behind financial support. The longer term issue is how you solve this problem of an unbalance with some countries that have big deficits - Southern Europe - current account deficits; others like the Germans have a surplus. And the deficit countries have got to accept financial discipline and austerity, but the Germans have got to reflate and expand and that balance is not accepted yet.

ANDREW MARR:

Can I ask you about the tax break story in the papers today - no tax breaks for couples who get married. Why is this important? Why is this something to raise now?

VINCE CABLE:

Well it was a big issue before the government was formed, I think, but it didn't find its way into the coalition agreement because the two parties differ. I mean I'm actually a great believer in traditional marriage - I've had two very happy, successful marriages, so I'm the last person to want to criticise marriage - but there's quite a difference between giving kind of artificial tax incentives which, amongst others, would sort of penalise widows, you know, because they're no longer married.

ANDREW MARR:

It just feels a slightly gratuitous piece of Lib Dem gunnery at this delicate moment.

VINCE CABLE:

I don't think so. I don't think that was the intention. I mean I know Nick Clegg is trying to focus our attention on the big economic agenda, which is actually what this government is really about, and I'm sure tomorrow he will be celebrating with me the fact that we're making this big reform of the banking system - something we fought for and has now been achieved.

ANDREW MARR:

Alright, for now … We'll be talking in a moment, but for now thank you very much indeed, Vince Cable.

INTERVIEW ENDS

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