The Vince Cable interview

Britain does not have “an underlying inflation problem”, according to the Business Secretary.

In this week's New Statesman, Vince Cable speaks to the New Statesman editor, Jason Cowley, about the threat of deflation, Nick Clegg and George Osborne, that tuition fee pledge – and why we could be heading for another financial crash. To read the piece in full, pick up the magazine on news-stands from tomorrow.

Until then, here are some of the highlights from the interview.

Cable argues that Britain does not have a problem with inflation and backs efforts by the governor of the Bank of England, Mervyn King, to keep interest rates low in order to stave off deflation. He says:

We don't have an underlying inflation problem. The Bank's job, as the governor keeps pointing out, is not to look at today's numbers, but to look 18 months ahead. It still seems that the centre of gravity at the MPC is very much at the governor. I find that reassuring.

People have not yet come to terms with how bad the financial crisis was, according to Cable, and don't realise that we could be heading for another. He says:

"I think the thing that worries me more than anything else [is that] we really haven't engaged with the real depths and seriousness of the financial crash. I was very impressed with that Warren Buffett metaphor that asset-backed mortgage lending was the atomic bomb, and that there are hydrogen bombs out there. I just don't think that collectively governments have got to grips with this at all." So another huge bomb could go off, sooner rather than later? "It's not imminent. But you can see this happening."

Cable accepts that the Lib Dem pledge not to raise tuition fees was a "serious mistake", and says it was one he never leapt to make.

"We all take responsibility for being involved in [signing the tuition fee pledge]. I wasn't very keen on that [at the time]. But it's collective responsibility" – he pauses, sips his tea – "we all did it. We had a meeting of our key people yesterday. One of my colleagues, who you would think of as quite critical of radical policy, said: 'We should get eight or nine out of ten for our policies, but one or two for our politics.' I think that's a fair assessment of how things are."

Even though Nick Clegg has taken a hammering from the public and press, the Business Secretary calls on people not to pity the Lib Dem leader.

"I don't think he needs pity, absolutely not, because he's quite a strong guy. But he has put up with an enormous amount of very, very vicious stuff, and what's worse about it, it's come from both sides. It isn't so much feeling sorry for him, just sort of feeling a sense of kinship. I've been subject to – not as much abuse as him – but a certain amount. It's relentlessly hostile. It also comes from, you know, our friends on the left." He smiles.

Ed Miliband has not made an impressive start, he says.

[He] comes across as sort of very clever but tactically smart, rather than strategic, and all this endless point-scoring I find isn't helping him or anybody else, actually. It's short term.

The Business Secretary supports fiscal autonomy for Scotland and that it should be free to set its own corporation tax, even at rates similar to Ireland's.

I think the logic of that is irresistible, if you have a devolved system. If you want power, then you have to have the responsibility, and the responsibility goes with making fiscal choices, and fiscal choices involve not just spending a block grant, which is what happens at the moment, but making decisions on how to raise revenue.

Cable also discusses the unofficial truce between him and George Osborne. "We have a businesslike relationship," he explains. Did you make a non-aggression pact? asks Cowley.

"Sort of, yeah. [But] there's no peace treaty thing. I meet him every week, have a good discussion about the current agenda. [Our pact] was not explicit, but there is an understanding. I respect the fact that we have to have a common view on the basic economic management, and he gives me a major role to play in the growth agenda, which is extremely important for government."

To read the piece in full, pick up a copy of the magazine on news-stands in London from tomorrow or subscribe.

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The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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