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'Economics Guru' Comes To Spelthorne

April 19, 2009 8:11 AM
Dr Vince Cable speaking in Spelthorne

Dr Vince Cable addressing Spelthorne Liberal Democrats

Lib Dem MP Dr Vince Cable paid a visit to the Greeno Centre, Shepperton, to talk about the economy, and take a question and answer session on a range of other topics. A packed room of over 70 people heard him describe Lib Dem plans to help the lower-waged and pensioners in the current economic downturn.

He also told the meeting what should happen with the banks that have been bailed out by Government.

Dr Cable said "The Government should set the strategy for the banks that taxpayers now have a huge stake in. We have all paid a huge amount of money to bail out the banks, and they should now be run in our best interests to help turn the economy around. The Government's current approach is simply not acceptable."

Lib Dem Parliamentary Spokesman for Spelthorne Mark Chapman hosted the evening and added "It is such a boost to have such a well respected MP visit the area. Vince is one of the key voices on the economy in the UK, and was also very entertaining on the night. He is impressed with Lib Dem efforts to help people locally, and added his support to our campaigns."

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Summary of Dr Vince Cable's talk to Spelthorne Liberal Democrats

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Vince Cable visited Spelthorne and gave his audience a real insight into the financial crisis and other current issues. He shared his views with over 70 members and supporters and clearly demonstrated why the Liberal Democrats are setting the agenda on economic policy.

The large audience was treated to a clear and well argued analysis of the start of the economic crisis and why Vince Cable had been warning for some time that the bubble would have to burst sometime. He described the UK mortgage lending practices of recent years as being "insane" and that the banks and building societies had abandoned sensible lending policies.

He said that the levels of personal debt in Britain - the highest in the world - had created a situation that was always likely to collapse like a pack of cards if economic conditions worsened. This happened when the worldwide banking systems went into meltdown.

Dr Cable pointed out that now half of the UK banking sector had effectively collapsed and was now under state control. This has been the effect on the British banks to what is a worldwide banking crisis - made worse in the UK because of our personal debt levels and reliance on the financial sector.

In discussing the reasons for the collapse of the world banking system, Dr Cable highlighted the role of US banks in the packaging up and selling of poor quality loans. These loans became traded financial instruments which were poorly understood and underpinned by belief that there would never be a instance of mass default. Of course, every time a slice of loans was traded someone made a commission and so the banks, and individual traders within banks, were incentivised to push this type of financial instrument.

When the defaults started to happen the banks responded by stopping to trust each other and gave rise to the "Credit Crunch". The situation became so acute that it is now admitted that the UK banking system came within 24 hours of collapse.

Throughout this period of crisis the Liberal Democrats have been offering ideas and pointing the direction that economic policy should follow. Vince Cable has proved to be the most reliable source of economic common sense in the UK. Through him the Liberal Democrats have demonstrated real leadership on economic ideas.

Looking forward Vince Cable offered a number of observations and solutions:

- Banks have been operating in the their own and not the general interest. This has to change in future with bank lending policies more aligned to the national interest, both for personal and commercial lending.

- The government needs to operate a deficit budget at this stage in the economic cycle to help combat unemployment and its consequences

- The Labour government has not spent money wisely. Vince Cable said that the cut in VAT had been very expensive and had not been effective.

- The government should have a programme of targeted investment that would provide jobs and create a tangible asset.

Turning to the level of interest rates, Vince Cable thought that lower interest rates were inevitable in the current situation. However, this was having a terrible impact on savers, particularly on retired people who relied on interest income.

The Liberal Democrats in parliament were focusing their efforts on getting support for those people on low incomes and who were on the margin of state benefits - where having even a small level of savings can cause benefits to be lost. In contrast he said that the Tories were seeking to cynically exploit the impact on savers for electoral advantage.

In the midst of all the economic gloom, Dr Cable still saw opportunities. Under Labour society has become less equal with at one end the "bonus culture" and at the other a growing group of the "very badly off". He wanted to see a fairer distribution across society - a core Liberal Democrat view.

On the practical level he would like to see more people on low income not being liable to pay income tax and for this change to be paid for by those at the higher end of the income scale. He did not see that this had to be achieved by higher income tax levels on there own, but by closing certain loopholes that materially favour the best off. As examples he cited the level of tax relief provide on very large pension contributions and the abuse of tax havens.

Vince Cable also called for a more robust approach by the government to environmental issues. Again he saw this as an opportunity for the UK economy both domestically and through exports. He wanted to see greater emphasis on public transport rather than incentives to buy new imported cars.

In wrapping up his speech Dr Cable expressed the view that the Labour Government had "lost it" on the economy and were only capable of a series of knee-jerk reactions. He dismissed the Conservatives' as having "absolutely nothing to say" on the crisis and that they had "no answers whatsoever". The Liberal Democrats were working hard to present a consistent and well-argued set of ideas - arguments that he thought were getting through to the electorate and that would bear fruit in the long-run.

Vince Cable answered questions on a range of subjects from an enthusiastic audience

Vince Cable answered questions on a range of subjects from an enthusiastic audience

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Dr Cable answered a range of questions from members on :

- The economic situation

- The moral basis of the Liberal Democrat party

- The growth and role of Quangos

- Further education

- Tax havens

- Working mothers

- Should the UK join the Euro

- How can Liberal Democrats get their voice heard in the media and Parliament

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Expectations were high before Dr Cable's visit and he did not disappoint. The audience was enthusiastic in its support. Everyone present was left with the very clear impression of a man and a party that knew what it was trying to achieve. The members and supports were left feeling much more confident that the party has the leadership and policies that this country needs. The visit by Dr Cable has given a real boost for the forthcoming County and European elections in June.

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Vince Cable signing his book - The Storm

Vince Cable signing copies of "The Storm"

The details of Vince Cable's analysis are contained in his new book - The Storm" - which has received great critical acclaim from both the press and academics.

"Cable's little book is well worth reading. It is probably the best book you can read to understand what on earth is going on out there, and does the sort of job that those blood-red Penguin Specials did decades ago. For the intelligent layman, it chronicles complex events as it explains them, pulling in just the right amount of wit, history, anecdote and theory along the way." - The Independent