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Vince Cable: ‘The Tories collectively could be appalling’

September 7, 2015 4:12 PM
By Vince Cable in The Guardian
Originally published by East Midlands Liberal Democrats

In an exclusive extract from his new book, After The Storm, Vince Cable reveals the tensions at the heart of the coalition

My approach to coalition was a mixture of defence and offence. Some things had to be stopped; others had to be done. I sought to block what I regarded as ideologically driven spending cuts, beyond what had been agreed as necessary for fiscal stability. There was a long hiatus after the breakdown of negotiations on 2015/16 spending, when demands from the Treasury would have done serious harm to vocational education outside the universities. I carried out a five-year, rearguard action to prevent high-flying Treasury graduates demolishing adult and further education - which they neither understood nor respected.

Under the coalition, it was possible to mobilise Nick Clegg when the Conservatives wouldn't take no for an answer. Not all the disagreements were between the coalition parties. Although I had difficult exchanges with the home secretary Theresa May and prime minister over immigration controls on non-EU students and skilled workers, almost all Conservative colleagues and ministers agreed, at least privately, that their policies were seriously damaging to business, universities and the wider national economic interest. As a Lib Dem, I was able to speak publicly about the way the government's claim to be "open for business" was being undermined. But I was struck by the inability of powerful Conservatives such as George Osborne, or even the prime minister, to move the home secretary an inch.

Most of the time and energy of my team was devoted to finding common ground with the Conservatives. Sometimes, an explicit deal was involved. I got Osborne's backing for the British Business Bank [a state bank that gives loans to small and medium-sized businesses], in return for not opposing his controversial scheme to create a new form of worker ownership with fewer rights [where workers received shares in exchange for waiving their rights to, for example, redundancy pay]. I assumed it wouldn't fly, as it didn't.

The coalition did many useful things, but usually at the price of a messy compromise. In my department, we boosted the advanced manufacturing and creative industries, undertook corporate governance reform, introduced shared parental leave and flexible working, rescued the Post Office and much else. The dilemma for me was whether to gain a distinctive identity for my party by opposing and blocking, or to get results by gaining Tory support for my proposals - which often meant I risked losing ownership of the issue.

A typical example was apprenticeships. In the tough bargaining around the 2010 spending round, I managed to ease some of the political pain of increasing student tuition fees by channelling more resources into apprenticeships. The Conservatives were quick to spot the appeal, and never ceased to claim ownership of the policy. We struggled as a party to gain the credit for popular policies that originated with us, since we were outgunned five to one across government.

Whitehall gossip had it that ours was one department where coalition worked, with genuine give and take. Others included Work and Pensions under Iain Duncan Smith (IDS), Health under both Andrew Lansley and Jeremy Hunt, and Transport under Patrick McLoughlin. Others were notoriously factional. The experience of Nick Harvey at Defence and Norman Baker at the Home Office was altogether less happy.

The Tories collectively could be appalling, with some ugly tribal prejudices, and when their party interests were directly challenged, they could be vicious. During the alternative vote referendum, they channelled funding to Labour-led groups that specialised in scurrilous personal attacks on Nick, which led to one of the few cases of real verbal fisticuffs in Cabinet. But as individuals they were invariably courteous, professional, often likable.

This ability to operate on different levels is part of the modus operandi of the House of Commons. But the Tories appeared to have an exceptional ability to compartmentalise, to commit political murder with a charming smile. I worried that, in its rapid ascent from the Championship to the Premier League, my party hadn't acquired this ruthlessness, and has now paid the price.

A key mechanism for resolving disputes was the "Quad" [where decisions are made by four ministers, two from each party]. It was Nick Clegg's achievement to have created a mechanism in which the two parties had equal status. I understand why he should have wanted his close friend and confidant Danny Alexander alongside. (I was told that Cameron would not have tolerated my being the fourth member.) But the upshot was that there were two Treasury ministers, and no one from elsewhere in government. Whatever their other admirable qualities, Nick and Danny seemed convinced of Treasury orthodoxy on matters of economic policy. I think they genuinely believed we should accept the Treasury's received wisdom over deficits and debt as part of the Lib Dem Strong Economy-Fair Society message. I didn't agree. I was never sure whether the economic thinking of the Treasury originated with officials within that department, seeking to retrieve their credibility after the financial crisis, or with George Osborne and his political advisers. But it amounted to the same thing. Osborne and the Treasury had effective control over the government machine, with political cover often provided by the Quad.

Since I was considered difficult to sack, I could be bloody-minded. The Treasury was able to intimidate weaker departments, such as Culture, Media and Sport, Defra and Justice. Some of the greatest pressure came on IDS at the Department for Work and Pensions, whose poor, disabled, unemployed and otherwise vulnerable clients were seen as easy targets for cuts. IDS was a significant figure, and a fundamentally decent man, but he spent much of his time fighting off pubescent advisers and Treasury officials with cruel ideas for saving money.

My relations with the Treasury were forged in the negotiations around the 2010 spending review. I believed that we had given too much ground, and in the process had compromised some good programmes. My officials, however, felt we had got off lightly; the agreed cuts to spending (25%) had already been agreed, in principle, by my Labour predecessors. I compensated by being more aggressive, and this contributed to a steady distancing from the chancellor. I believed in the need for government to be disciplined in its management of public money and deliver large savings; he had an ideological belief in a small state, as well as a ruthless eye for party advantage.

I suspect there is an institutional problem with a powerful Treasury operating opaque and antiquated systems of spending controls, with no balancing force - and no obvious capacity for thinking long term about the economic future of the country. I tried, like Michael Heseltine and Peter Mandelson before me, to create a balancing mechanism in the form of a strong and respected Business Department, but my successors have their work cut out to preserve it - if they want to.

Civil servants often observed that the coalition worked better than the Labour government, since personalities were not allowed to get in the way. Cameron and Clegg deserve credit for that. In my own corner, sometimes portrayed as an ideological battleground between a grumpy, leftwing secretary of state and true-blue Tory ministers, relations were always businesslike, often cordial. With David Willetts, universities minister, there was a real sense of partnership.

I took the view from the outset that we should leave our weapons at the door and work as a team. Towards the end, there were spats about who should claim the credit for various achievements, though I take satisfaction from the fact that there were achievements to fight over, rather than disasters for which to apportion blame.

• This is an edited extract from After The Storm: The World Economy & Britain's Economic Future, by Vince Cable, published on 17 September by Atlantic Books at £18.99. To buy it for £15.19, go to, or call 0330 333 6846

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