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Page last updated at 11:32 GMT, Sunday, 7 March 2010

'In terms of two other parties'

On Sunday 7 March Andrew Marr interviewed the Liberal Democrat deputy leader Vince Cable.

Please note 'The Andrew Marr Show' must be credited if any part of this transcript is used.

Vince Cable on The Andrew Marr Show

ANDREW MARR:

Now which Party Leader has talked of the need for savage spending cuts? And which would-be Chancellor has said there can be no sacred cows; even the National Health Service might have to take a hit? Well the answer is Nick Clegg of the Liberal Democrats, and his Treasury Spokesman Vince Cable. So as the opinion polls revive talk of a hung parliament, is Mr Cable closer to the Tories on economics than to Labour? Well he's with me now. Good morning.

VINCE CABLE:

Good morning.

ANDREW MARR:

Well let's start with that question because what you've said about the need for really quite radical surgery on the public finances sounds closer at the moment to what the Conservatives are saying than to what we've had from Labour.

VINCE CABLE:

No, we're not defining the argument in terms of the other two parties. I mean the basic point is that the British economy is in very bad shape. It's very, very weak and we've got …

ANDREW MARR:

Are we close to a double dip, do you think, recession?

VINCE CABLE:

That's certainly a risk, and what any incoming Chancellor has to bear in mind is that on one hand we need to maintain market confidence - absolutely crucial, the country has to be financially responsible and being seen to be responsible dealing with the deficit - but equally we've got to have recovery, we've got to have growth because unemployment is going up and if we don't have economic growth then the deficit actually gets even wider. And that's one of the reasons why I'm very much opposed to the Conservative approach of rushing into cuts without … regardless of the condition in the economy. That's not sensible.

ANDREW MARR:

And yet you're in a difficult position also because you want to impose some sort of radical surgery and tax rises and so forth, and yet the closer you get to being part of a coalition government or whatever it might be in a hung parliament, the further south the pound seems to go.

VINCE CABLE:

I don't think the two things are connected. We had a very small downward movement in the pound earlier this week - which was probably caused by the fact that Pru, the insurance company, was selling lots of sterling, and nothing to do with politics, but it was given a political spin. No, I mean our view, my view is that of course as a party we have to be on the side of financial responsibility. We certainly don't want to see any damage to the national economy. Of course it is very important that the country retains its credit rating, and whatever role we find ourselves in, we will of course give priority to that.

ANDREW MARR:

We're getting … We've had reports over the last few days that Alistair Campbell come budget time will be announcing a more specific rolling programme of cuts. Is that now necessary, do you think, despite the weakness of the economy?

VINCE CABLE:

Yes, I think we have to spell out both for the British public, as well as the markets, the British public need to know what's going because otherwise nobody has any buy-in, so there are very unpopular decisions that are going to have to be made. And that's why since last summer, you know Nick Clegg and I have been trying to spell out you know really very specifically some of the things that might have to be done in terms of public spending.

ANDREW MARR:

And you've talked on the other side about the mansion tax and higher taxes on the rich and so on. What about …

VINCE CABLE:

Well mansion tax has nothing to do with balancing the budget. It's part of a package of fair taxation. We want to see taxes cut on low paid people. We want to see under £10,000 a year lifted out of tax altogether, and the mansion tax is a way of paying for that.

ANDREW MARR:

So does that mean that something like the Sunday Telegraph reports today - VAT on food - would be against your principles?

VINCE CABLE:

Well I'm pretty certain it would, yes. I mean this is highly unfair and it's very regressive. I mean no sensible person under these circumstances can rule out tax increases - I mean that's for sure - but that seems to be probably the worst way of doing it. The specific tax increase we've advocated is in relation to the banking system. The banks currently are underwritten by the taxpayer. You know too big to fail. They failed. The taxpayer bails them out and we think they should pay for that insurance in the form of a supplementary tax on their profits. That's the one specific tax measure we've outlined.

ANDREW MARR:

Right, okay. Let's turn to politics generally. Nick Clegg on this programme said that the Liberal Democrats, if there wasn't a decisive outcome to the General Election, would support the party with the greatest mandate. Do you understand what that means? Are we talking about the party with the most votes or are we talking about the party with the most seats, or what?

VINCE CABLE:

Well I don't think it's helpful or necessary to spell out precisely what that means. I mean there are all kind of combinations that could arise.

ANDREW MARR:

Well it's kind of important, isn't it, to know you know what the Liberal Democrats would do in those circumstances?

VINCE CABLE:

I think it's important for the public to know what broad approach we would take to the country. And as I said earlier on, the outcome of the election would be in a very difficult economic situation. We would act in a financially responsible way. We've made that very clear through our policies. Now whoever we talk to, you know however the situation evolves, that's a secondary issue. And it's not for us to choose. I mean you know after all, it's the public …

ANDREW MARR:

(over) Sure, but you would work with the party with the biggest mandate, whether it's MPs or votes?

VINCE CABLE:

Well they may wish to work with each other, as has happened in Germany. All parties might wish to work together. And let's not forget, I think the public mood …

ANDREW MARR:

(over) Slightly difficult to see.

VINCE CABLE:

… the public mood I think is very much for politicians working together rather than doing tribal politics …

ANDREW MARR:

Right.

VINCE CABLE:

… and that may be the big driver in this election.

ANDREW MARR:

The impression that I've got, and I may be wrong about this, is that the Liberal Democrats would not seek to make a formal alliance either with the Labour Party if it was going down in public esteem or with the Conservatives because of your traditional differences with them - Europe and so on - but would support, would stand back and let a minority government, if that was the situation, do their best. Is that true?

VINCE CABLE:

Well we're not ruling things out. I mean you know parties …

ANDREW MARR:

So you could make alliances with other parties?

VINCE CABLE:

Anything is possible. Parties can work together in different ways. And as I said a few moments ago, I think it may well be … I think it is the case that the public are really rather fed up with very narrow, short-term tribal politics and they want to see politicians rising above that - and particularly as they sense we're in an economic crisis - and we'll do our part in that.

ANDREW MARR:

Could you sit in a Cabinet with either of the other two parties?

VINCE CABLE:

Not as an individual. I mean I'm part of the Liberal Democrats …

ANDREW MARR:

(over) No, no, as a Liberal Democrat.

VINCE CABLE:

I think we could work with other parties. Why not? I think the public expect us to be grown up and businesslike, and that's how we would approach this.

ANDREW MARR:

And when you look at these opinion polls and particularly what's going on in the West Country and Wales and other sort of key battleground areas, do you think we're heading for a hung parliament?

VINCE CABLE:

It's possible. The polls suggest probably not, but it's certainly a possible outcome. And I don't think we should be afraid of that. I don't think the public are afraid of it because of the reason I've given - that I think people rather like the idea that politicians might have to work together - and there's certainly no reason to be afraid of it from a national point of view. I mean there's this canard that keeps being put around that somehow this is bad for the economy. Absolutely nothing of the kind. Quite apart from our own position, which is for financial responsibility, all the evidence from other countries in the Western world is that governments comprising of different parties or minority governments have a better record in practice of managing economic crises than one party - often with a very narrow popular mandate.

ANDREW MARR:

And aside from the economic crisis, is there a bottom line that you and your party have got for working with another party? Are you still looking for radical change to the electoral system as a sine qua non, or are there no deal breakers as far as you're concerned?

VINCE CABLE:

Well any deal breakers are things that we discuss publicly. I mean there are things that we believe in and we've made it very clear as far as the economy's concerned, we want to see financial responsibility, we want to see fair taxation, the British economy rebalanced away from too much dependence on the financial services. It's all out there. There's no sort of secret agenda, I can assure you.

ANDREW MARR:

Alright. Vince Cable, thank you very much indeed for joining us for now.

INTERVIEW ENDS




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