Vince Cable's speech to Spring Conference 2015

March 14, 2015 3:20 PM
Originally published by UK Liberal Democrats

Well, it's is great to be back in Liverpool. Last time we were here was shortly after the last General Election: adjusting to life in government.

We were central to the country's political and economic future: forming a stable coalition government to deal with a national economic emergency.

But the last few years have been tough for all of you.

Even those of us in the privileged position of being at the centre of government are forced to confront the question: has it been worth it? For the country - absolutely.

But for the party? My answer is 'yes', unambiguously.

So let me tell you a story about my last 5 days, which in a nutshell, capture what Lib Dems have done in government in the last 5 years.

On Tuesday, to celebrate apprenticeship week, and having delivered over two million apprenticeships this parliament, I took two apprentices to the Cabinet.

These were two young women pursuing apprenticeships in mechanical and software engineering. One had stellar A' Levels but chose the apprenticeship route instead. Both were passionate and eloquent about the opportunities they now had.

Five years ago this event could not have happened. Apprenticeships were uncommon and low status - a second best option for those who had failed at school.

But Lib Dems in government insisted on the back of the painful decisions over tuition fees that more resources be ploughed into good vocational training for the 60% who don't go to university.

The number of apprenticeships has doubled; quality has risen and there has been a massive transformation in attitudes. Apprenticeships are now seen as a serious career option.

The Tories say this is 'a coalition success story' which if you look in the coalition dictionary is Tory speak for 'here is a successful Lib Dem policy which we weren't too keen on to begin with but which plays well with our focus groups and we would now like to own'.

The Tories would also like to own my second Lib Dem success story, an event to celebrate a sustained drive for gender equality and a commitment to double the proportion of women on the boards of FTSE 100 companies - to 25%. This year we will meet the target. And every FTSE 100 company now has a woman on the company board.

There is a lot more to do but a glass ceiling has been broken - thanks to Lib Dems in government. I was fortunate enough this week to celebrate the women who have reached the top of British business since 2010. It was a very proud moment.

The third event this week touched me deeply. It stemmed from the work Paul Burstow and Norman Lamb have done, with Nick Clegg's support, to focus attention and resources on mental illness.

It addresses the needs of the 1 in 6 members of the workforce who have mental illness or stress-related conditions. The costs to them and society are vast.

Some of you will know my own story. A mother who experienced a long incarceration in a mental hospital when I was ten after the birth of my younger brother, suffering from what is now understood as post-natal depression.

She was cured in due course with the help of adult education rediscovering a world of learning which she had abandoned at 15 to work on the production line in a chocolate factory.

I was delighted therefore to be able to announce last Wednesday that 145 adult education colleges and other institutions have bid for a £20 million fund which we secured from the Treasury, with Danny's help, to provide adult education courses to help the mentally ill back into society.

Between those events I was invited to open the Stock Exchange and celebrate Britain's 1,000 fastest growing companies: the embodiment of a business-led recovery.

At the reception I met someone I had visited earlier in the parliament: a west Midlands company making castings for the car industry.

Back in 2010 he was struggling; now he is booming on the back of our successful drive to revive manufacturing which we have led in my Department.

The industrial strategy, which Liberal Democrats launched in government, has created a solid framework for long term collaboration between business and government to build up British industry and its supply chains.

It is so successful that both Labour and the Tories now want to be part of it - as they should be.

And lastly I gave a speech this week to launch a new innovation centre. It took me back to my first day as a Cabinet Minister. In between the Queen and the Cabinet and David Cameron's first - and last - visit to my department.

I was deluged with advice. One idea grabbed me: how to bring to Britain what the Germans do brilliantly well: converting science into new technologies.

Britain has been great at science but less so at innovation. This is now changing fast because I acted on that advice. We now have centres for innovation in advanced manufacturing and seven others - from offshore renewable technology, to cell therapy to new transport systems like driverless cars.

These centres - our catapults - are becoming the envy of the world, including the Germans.

Five events in one working week, out of five years in government. But these highlights are just some of the things we have been able to achieve in office.

In five years I have been able, with Nick's support and the work of Ed Davey, Jo Swinson, Norman Lamb and Jenny Willott who have worked with me in my department, to achieve a vast amount to create a genuinely responsible, modern capitalism. We have:

  • brought in binding shareholder votes on executive pay.
  • legislated for shared parental leave and flexible working.
  • made Company reporting much more transparent and created a public register of company ownership
  • promoted employee share ownership
  • strengthened legislation against cartels and to protect consumers.
  • brought in legally binding codes to support small business: farmers from supermarkets, pubs from pubcos and cash-strapped small companies from late payers.
  • legislated against abuse of zero hour contracts and greatly strengthened enforcement of the minimum wage.
  • We have negotiated and agreed a multilateral arms trade treaty. And I have used export controls to stop exports of drugs used in capital punishment in the US.

Much of this was in the face of Tory opposition. Indeed the Tories have spent five years promoting 'hire and fire' legislation and trying to end the right to strike.

And - we - saw - them off. What this shows is that our party is unashamedly pro-business but also pro-consumer and pro-worker.

But I now want to talk specifically about the future of economic policy: not just what we have achieved but what we aim to achieve.

To win the argument we need to have a vision; not just a narrative about the past. We are still dealing with some of the toxic legacy of the financial crisis which is what got us into government in the first place.

And of course, there is a cleaning up job still to be done from reducing the post-crisis deficit and from finishing reconstruction of the banks.

But beyond these hygiene factors there is a bigger task. I want to set out how we progress from rescue to recovery to a truly great British industrial renaissance.

Our opponents show little sign of grasping the magnitude of what is required. They promised lavish tax cuts or spending out of money they don't have to give electoral bribes to their favoured demographics.

It used to just be the Greens and UKIP who we mocked because their economic policies involved repealing the laws of arithmetic: cutting taxes, increasing spending and reducing budget deficits all at the same time.

Now this fantasy world has been mainstreamed by Labour and the Conservatives.

The consequences for fairness are also utterly perverse. We have just emerged from a disastrous banking crisis in which leading villains were the investment bankers.

But the main winners from promised Tory tax cuts would be retired investment bankers. And the main winners from Labour's new university finance policy would be the investment bankers of the future.

So, how do we do better? How do we build a strong economy? We have made a start in government. Britain is an emerging success story with rising employment and production.

But we have had false dawns before. We need an economy which no longer depends on home consumption fuelled by debt and housing inflation but is driven by investment, exports and industrial success.

To achieve this we need a much stronger skill base. We are chronically short of all kinds of engineers, at professional and technical level, construction skills from site managers to bricklayers, digital skills in coding and systems design and much else. We should welcome talented people from overseas.

But we mustn't let the British economy become like the Premier League where the top clubs - even in Liverpool - are stuffed with bought in talent and there are barely enough home-grown players to make up a decent national team.

Hence, the need for a vast effort to raise the level of vocational skills training in Britain. I referred earlier to our success in creating an apprenticeship revolution.

To carry this revolution forward will require more support from government, particularly in building up large numbers of higher apprenticeships - to degree level.

And every £1 spend on one of these apprenticeships generates £18 for the national economy. Skills investment is a no brainer.

We need also to build on our commitment to innovation and science. Our competitors pour money into research and development. We need to double the innovation budget to get close to the average of our main competitors. And we must grow our basic science research alongside it.

It isn't just about spending money. If we are to nurture our own science base in Britain we cannot allow company takeovers that are driven by short term financial logic and tax breaks, which destroy it.

That is why we need a new public interest test for takeovers which safeguard the science base, in which so much taxpayers' money has been invested.

And none of this can work unless companies, especially the small and medium sized companies, have access to finance. Seven years after the banking 'crash', many companies still struggle to get finance to expand.

To deal with this problem, Lib Dems in government have delivered the Business Bank which has so far got out over £3bn to SMEs. The Green Investment Bank has also generated £6bn of private and public investment in green projects; and the Regional Growth Fund has invested £1bn and generated £3bn more in private investment.

The point is that public and private investment work well together. Unlike the other parties, we the Liberal Democrats do not see the one as the enemy of the other.

Our successful interventions need to be scaled up. And RBS must not return to private ownership until it is strong enough to support lending to the real economy and fully repays the taxpayer investment.

We have a vision of a British industrial renaissance in which financial institutions cease to operate like a casino and there is adequate long term investment - private and public. We are now seeing a welcome recovery in business investment. But badly needed public investment in public transport, social housing, science and skills is being held back.

The Tories say the government cannot borrow more for investment. But this is foolish economics. It surely depends what the borrowing is for.

Borrowing for productive investment is not the same thing as borrowing to pay for salaries or benefits. It generates the future income to make debt sustainable.

That is simple common sense as any business understands. At a time when interest rates - the cost of government borrowing - are very low it is simply negligent not to invest in our future.

It is critical too that we don't turn our backs on the world. The Tories have a strange, split personality which embraces, on one hand, free market economics and, on the other, nationalism - or, at least, English nationalism. A century ago they believed in closing down trade: protectionism.

Now they try to throw obstacles in the way of highly skilled Indian software engineers or Brazilian students or Chinese business visitors in order to meet some ludicrous, unobtainable target set for them by Nigel Farage or Migration Watch.

And their fear of UKIP has led them into the cul-de-sac of the EU referendum: potentially years of uncertainty which will scare off many inward investors who want to retain or bring jobs here for British workers.

And if the result is negative or, even, close it will leave Britain in a no-man's land: diminished, marginalised and irrelevant.

There are many sensible, moderate Conservatives who are horrified by what their party is becoming. We can offer them a home as we can to social democrats increasingly disillusioned with Labour.

The message from our opponents is a negative one. They define themselves by what they are against. Labour's default position is anti-business; this is madness in a country which depends on business to create wealth and jobs.

The Tories have a lot of antis. They don't like trades unions. They don't like people dependent on benefits. They don't like multiculturalism. I have called this an attack on workers, shirkers and burqas.

By comparison we have something positive to sell on the doorstep. There is a real record of achievement which demonstrates what those armed with liberal and social democratic values can achieve, concretely, in government. We know there is much more to be done.

But we can now see, thanks to Lib Dems in government, the outlines of an economy that is strong, sustainable and a business culture that is long-term and socially responsible.

Let's take this proud record to the country. Thank you.