There is little doubt who most ordinary people would like to see as chancellor after 6 May. Not the granite-faced Alistair Darling, not Gordon Brown’s mini-me, Ed Balls, and not George Osborne. The Liberal Democrat’s Vince Cable would waltz to the top of any popularity poll.
For most of the past few years, there was as much chance of that happening as of Brown admitting he’d bankrupted the country. The Lib Dems didn’t have so much as a sniff of power. Saint Vince, the Sage of Twickenham, could pontificate in an amiable, genial manner, and everyone could say how marvellous he was – without having to worry for a second that the man might actually get his hands on the battered red box come Budget Day.
In the space of a week, that has all changed. In the wake of the first televised debate between the three party leaders, Lib Dem support has surged. A hung parliament looks a real possibility, with Cable as chancellor the price of Lib Dem support. It would be an easy concession for either of the other parties to make. He’s popular and looks competent. But so far Cable’s record has escaped any real scrutiny. The truth is, he flip-flopped during the financial crisis, and has offered a muddled and platitudinous manifesto for the election. At precisely the moment when the UK will run the risk of a meltdown in confidence in the capital markets, Cable is the very last person you would want to see as chancellor.
His popularity is understandable. He has a knack of taking difficult concepts and explaining them in ordinary English. For a country used to Brown’s impersonation of a mid-level Soviet bureaucrat reciting tractor production statistics, it makes a refreshing change. But his reputation is absurdly over-inflated.
Cable makes much of the fact that he forecast the financial crisis. In reality, he made a few speeches warning about rising house prices and debt levels. He suggested a couple of times that Brown hadn’t really abolished boom and bust. But he didn’t really say anything that the Conservatives, or the Bank of England governor, or indeed dozens of financial pundits, weren’t saying. Nor did he warn of the two key threats to the British economy: Brown’s regulatory regime, which handed banking supervision to the Financial Services Authority; or the build-up of public spending that has so undermined our competitiveness. Indeed, his party went into the last election advocating even higher spending.
Cable’s policy on the banking crisis also changed from one interview to another. At one point he opposed quantitative easing, then supported it. He backed Brown’s huge Keynesian splurge, then, with a straight face, started warning everyone about the dangers of the deficit. Through all of those positions, you’ll search in vain for coherence or consistency.
Worse, his manifesto pitch is dismally weak. The UK is facing its most serious economic challenges for a generation, yet Cable offers nothing more than platitudes. He claims he is he is being honest about cutting the deficit. Yet his main proposal is cancelling the Trident nuclear missile system, which won’t save money in the short term. The rest will be done by “closing loopholes” in the tax system. But the taxman’s draconian, bullying tactics are already driving companies out of the UK. Another clampdown will only make that even worse.
Then there are his tax reform proposals. Cable wants to raise the tax threshold to £10,000. Fair enough – it is shocking that someone struggling to make ends meet on earnings of less than five figures should have to pay income tax. But how will it be paid for? More clampdowns on loopholes, and taxing capital gains at the same rate as income tax. There is something to be said for levelling all taxes. But capital gains tax at 50%? Presumably the intention is to drive every last entrepreneur out of the country.
Meanwhile, his ideas for rebooting the UK economy verge on the comical. One idea: regional stock exchanges “without the heavy regulatory requirements of a London listing”. But the reason the Manchester and Liverpool exchanges withered was because no one really wanted them – the telephone meant it was just as easy to do business in London. And if regulation is any lighter, won’t they just be a playground for spivs and fraudsters? Haven’t we been through enough financial scandals without creating more? Most of the rest of the manifesto is taken up with fiddly initiatives to promote green investment. It’s just not serious. Britain is the world’s fifth-largest economy. Even if we do become a world leader in wind farms and solar panels – and we have a long way to go to overtake the Germans – it won’t make much difference.
There is nothing about the need to cut corporation tax to attract foreign investors. Nothing about protecting all the foreign currency the City brings into the country – just populist banker bashing. Nor is there any explanation of how joining the euro – still a Lib Dem plan – will stop us turning into another Greece. But then Cable isn’t really a serious politician. And if he does make it to No. 11 in early May, the currency markets will conclude the country isn’t serious about tackling its economic problems either.