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Last Updated: Sunday, 9 March 2008, 15:53 GMT
Vince Cable interview transcript
On the Politics Show, Sunday 09 March 2008, Jon Sopel interviewed Liberal Democrat Deputy Leader Vince Cable

Vince Cable MP
People often get the idea that because companies make a lot of money, it should be taken off them automatically and that's not sensible because they often need to reinvest that
Vince Cable

Interview transcript

JON SOPEL: I spoke to Vince Cable earlier to-day from the Party Spring Conference in Liverpool and I asked him what he expects Mr Darling to do.

VINCE CABLE: Well I think there are two big problems. I mean one is the overall condition of the economy, where we have the combination of a debt problem in peoples' households, a declining housing market, a general loss of confidence, potentially a recession, I don't know. The question is how to deal with the impact of all that and certainly we've been making proposals in relation to trying to head off repossessions, trying to help people with personal advice. But in relation to the budget itself, there's not a great deal of scope.

He can't do what they're ? happening in the United States and cut taxes and increase spending; there simply isn't the flexibility. So what he will probably do is a few relatively small things and possibly raising vehicle excise duty on high polluting vehicles, which is ? there is an all party consensus round that. He may do what I and others have been arguing in relation to drink taxation. Whether he uses the revenue to cut taxes on other things, fruit juices as I recommended or puts it in to the pot of the Treasury, I don't know.

But I think something along those lines is definitely expected. And on the spending side he's more or less committed himself I think to doing something to ease the problem of child poverty. So something on tax credits. That would be my expectation.

JON SOPEL: You just mentioned your proposal about increasing duty on alcohol and reducing VAT on fruit juices. It's a gimmick isn't it. Put it another way, small beer.

VINCE CABLE: Well it is in some ways but I think we're trying to send a signal here that what's happened over the last ten years is that some people have seen their taxes rising very considerably. Certainly council tax has risen much faster than inflation. People on low incomes have seen income tax rising, 10% to 20% on the lower band and yet some of the most alcoholic drinks have actually fallen behind. So I mean in a sense the government is colluding in cheap drinks with all the bad effects that has on people's health and anti-social behaviour. So quite a powerful signal needs to be sent and I added the extra twist that rather than just have that money disappearing in to the Treasury, people are rather sceptical about that ? to try and demonstrate that it's being used in a productive way, by cutting what's actually a penal rates of tax on, on healthy drinks.

JON SOPEL: One of the ideas that's being discussed is a windfall tax on the energy companies. Would you support that.

VINCE CABLE: Well I don't favour the concept of a windfall tax but there is a specific issue here which is the power companies have been handed on a plate free licences under the European Trading Scheme. I mean it's effectively a gift which they've simply assimilated in to their profits and that money needs to be clawed back.

I try to avoid the concept of windfall tax because people often get the idea that because companies make a lot of money, it should be taken off them automatically and that's not sensible because they often need to reinvest that. But I think there is a particular problem with the power companies and I would like to see the Chancellor certainly making sure that that money goes in to environmental projects, if it can be done by agreement with the industry, all to the good but if not, the government may need to take a direction on it.

JON SOPEL: Mr Cable, how would you describe the sort of week your Leader has had in the Commons.

VINCE CABLE: Mixed I think. We've had a difficult week. He had to take some tough decisions on problems that he's inherited. But on the day that we had that difficult vote, I mean people had forgotten, it wasn't reported that shortly afterwards there was a vote on Europe, led by some of the right wing rebels in the Tory party, we voted with the government and some of the Conservatives like Ken Clark against it, and the Tories had a whipped extension.

This was never reported at all, so to some extent we've been the victim of you know, rather critical reporting. I don't complain about that, that's the way the world is but you know, Nick Clegg did the best he could in a very difficult situation, given that we haven't had the vote that we called for, which was a referendum of Britain's membership of the European Union.

JON SOPEL: Did the best he could. That's sort of rather damning with faint praise isn't it.

VINCE CABLE: No, no, no. If you take his record as a whole, he's got off to a very good start. I mean he's performed very well in the House of Commons, there's a very good mood in the Party. Our position in the polls is rising, you simply asked me about the last few days and the position, what had happened in relation to the European Union and I'm explaining it as it was.

JON SOPEL: Okay, Vince Cable, thank you very much indeed.

VINCE CABLE: Thank you.


Please note BBC Politics Show must be credited if any part of these transcripts are used.

NB:These transcripts were typed from a recording and not copied from original scripts.

Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for their accuracy.

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The Politics Show Sunday 09 March 2008 at 12:00 GMT on BBC One.
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