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Last Updated: Sunday, 18 September 2005, 07:31 GMT 08:31 UK
Interview: Vincent Cable
By Justin Parkinson
BBC News website political reporter

Vincent Cable
Dr Cable wants to fight 'an air war and a ground war'
Vincent Cable does not come across as a man suited to the daily grind of British politics.

The Liberal Democrats' Treasury spokesman - a donnish, Cambridge-educated economist - would seem to appear more at home deciding policy from on high than canvassing in Conservative marginals or delivering soundbites for TV.

But he realises that turning Britain's third party into an election-winning force is a "long slog".

In this summer's general election, the Lib Dems won 62 seats, more than at any time since the 1920s but still well short of the influence Mr Cable craves.

The gain of 11 MPs was "not particularly disappointing", he said, although this was towards the bottom end of expectations.

'Maturing party'

"When I first joined the SDP, which became the Alliance, there was the hope of a breakthrough at a national level.

"There has been a maturing and a better understanding that breaking through is very hard work.

"The key point is that we are now everywhere. We are in rural areas and in inner cities, suburbs and seats throughout the UK, which is something that the Tories can't claim.

"The Tories are now the party of rural areas and Labour essentially is in the big cities."

But, in Westminster politics at least, they still lie third.

'Small-L' liberals

What are the Liberal Democrats trying to "break through"? Voter apathy, ignorance, even disdain?

The party's campaign chairman, Lord Razzall, delights in telling the media that half the British population describes itself as "small-L" liberal.

At the election, though, just 23% voted "big-L" Liberal Democrat.

Frustration is a mild word to describe what activists must feel.

The economy - Mr Cable's area of expertise - is seen as the key to making the party electable.

Its big policies here are quite well known - local income tax to replace council tax and a 50% income tax rate for those earning above 100,000.

Yet, even Mr Cable admits that the latter, the most "progressive" policy among the main three parties, is not a "sacred cow".

Taxation will form one of the main debates at the Liberal Democrat conference in Blackpool next week.

Taxes shouldn't be higher; they should be fairer. We must be a party that's disciplined. We must make tough choices
Vincent Cable

Mr Cable said: "I don't have any sacred cows. The 50% rate has become a kind of totemic policy.

"It has some advantages. It's simple and it sends a clear redistributive signal and fulfils quite a lot of remits

"But, like most developed countries, we are moving to lower marginal tax rates.

"I'm looking for a balanced debate within the party and our aims and looking at other ways to achieve them.

"Taxes shouldn't be higher; they should be fairer. We must be a party that's disciplined. We must make tough choices."

Flat taxes

One possible option is the system of "flat taxes", adopted by several eastern European countries recently and popular with some Conservatives.

Under this method, all tax payers are charged the same rate.

Supporters say this is fairer and simpler than the current system, especially if the threshold at which people start paying is made higher, say 10,000 or 15,000.

Ken Clarke
Lib Dems share 'common ground' with Ken Clarke but not his party, Dr Cable says

Opponents think flat tax is a way of making the rich richer which hits middle-earners disproportionately.

Mr Cable said: "We certainly ought to have a look at this. We shouldn't have an instinctive negative reaction.

"The local income tax is a flat tax, as everyone would pay the same rate.

"Part of the problem is that different people mean different things by a flat tax.

"It might mean the whole tax system or just direct taxes or just income taxes.

"The crude, simple, single flat tax of the type that's been developed in countries like Estonia or Russia wouldn't work in the UK for the simple reason that it would substantially reduce tax revenue at the top end.

"You could help people at the bottom end by raising the level at which people start paying, but this could hit middle-income households, which could have some nasty and unpopular consequences.

"There's a need for fresh thinking."

Any Liberal Democrat tax policy, he says, will show a "commitment to fairness and social justice".

Mr Cable urges his party to adopt "distinctive policies".

"I believe that as Liberal Democrats we should be appealing to people who are disillusioned with Labour and the Conservatives.

"We have been very distinctive in taking the lead on Europe, the environment and civil liberties.

"They are neither of the left or right but they are distinctive to us."

Whether these issues sway a great number of voters is another matter.

Conservative deal?

Without proportional representation at Westminster, the Lib Democrats' best chance of real power might seem to rest in a hung parliament at the next election.

In a recent pamphlet, Mr Cable wrote: "If the pendulum swings, it may swing to a combination of Conservatives and Liberal Democrats and, thus, to a period of minority government or coalition, in some form."

Lib Dem leader Charles Kennedy has dismissed the idea, saying the party will remain an "independent political force".

However, should Ken Clarke win the Conservative leadership contest, his aides say, he would be well placed to win back Lib Dem voters.

Some commentators say he could form a Conservative-Liberal pact, but Mr Cable, more on-message than in the pamphlet, is sceptical.

"The two policies that Ken Clarke is most famous for are his opposition to the Iraq war and being a very defensible and quite courageous pro-European. These are both policies he shares with us.

"He seems to have had second thoughts about Europe within the last few weeks. However, there is common ground. But we don't have common ground with his party. He seems to be going towards his party.

"There are cultural conservatives and those of a more outward-looking liberal disposition. Even if Ken Clarke were to be chosen as leader, his party has a very deep structural problem. That could have a very messy outcome indeed."

Chancellor Gordon Brown, seen as a likely successor to Tony Blair, is praised for overall management of the economy but criticised for that most un-Liberal quality of "centralisation".

'Big ideas'

No contact has been made with either side, according to Mr Cable, who first stood for parliament in 1970, as a Harold Wilson-supporting Labour candidate in Glasgow.

It was not until 1997 that he finally reached the Commons, after working as an academic and chief economist at Shell.

Having canvassed around Britain, Mr Cable says the party should not lose focus on local issues, even when coming up with "big ideas".

"What we always say is that is that we are fighting an air war and a ground war. I'm hopeful of further progress."

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