Clegg slaps down Cable on borrowing

Deputy PM comes to Cameron's aid and warns that borrowing for growth would risk a spike in interest rates.

Downing Street has responded to Vince Cable's dramatic intervention in the New Statesman by seeking to paint the Business Secretary as a lone maverick and Nick Clegg has just come to their aid. On his phone-in show on LBC this morning, the Deputy PM said of Cable's call for the government to borrow for growth: 

If you do decide to say: 'to hell with it, let's borrow £40bn – £20bn' –huge amounts of money – because there is no point doing it unless you do it on a big scale – there are risks of course, and I know Vince acknowledges it, you unwittingly make it more difficult for everyone else because interest rates might then go up.

He added: "The question is not whether capital investment is a good thing – everyone in the coalition agrees that – but how do you pay for it? This is where the balance of judgment is; you need to balance the risk."

While Cable argues that the risks of borrowing to invest are now outweighed by the risks of not doing so, Clegg has stuck firmly to the Cameron-Osborne line that deficit-financed stimulus would cause a spike in interest rates. 

Clegg's intervention is helpful for Labour as well as the Tories. Team Balls responded to Cable's essay by similarly portraying the Business Secretary as an isolated figure. "His words today read like they have been written by a Secretary of State who despite being in office, is not in power," said shadow financial secretary Chris Leslie. Clegg's rebuke to Cable means Balls and Miliband can continue to argue that only Labour is offering a genuine plan B. 

Nick Clegg speaks at last year's Liberal Democrat conference in Brighton. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: André Spicer
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“It’s scary to do it again”: the five-year-old fined £150 for running a lemonade stand

Enforcement officers penalised a child selling home-made lemonade in the street. Her father tells the full story. 

It was a lively Saturday afternoon in east London’s Mile End. Groups of people streamed through residential streets on their way to a music festival in the local park; booming bass could be heard from the surrounding houses.

One five-year-old girl who lived in the area had an idea. She had been to her school’s summer fête recently and looked longingly at the stalls. She loved the idea of setting up her own stall, and today was a good day for it.

“She eventually came round to the idea of selling lemonade,” her father André Spicer tells me. So he and his daughter went to their local shop to buy some lemons. They mixed a few jugs of lemonade, the girl made a fetching A4 sign with some lemons drawn on it – 50p for a small cup, £1 for a large – and they carried a table from home to the end of their road. 

“People suddenly started coming up and buying stuff, pretty quickly, and they were very happy,” Spicer recalls. “People looked overjoyed at this cute little girl on the side of the road – community feel and all that sort of stuff.”

But the heart-warming scene was soon interrupted. After about half an hour of what Spicer describes as “brisk” trade – his daughter’s recipe secret was some mint and a little bit of cucumber, for a “bit of a British touch” – four enforcement officers came striding up to the stand.

Three were in uniform, and one was in plain clothes. One uniformed officer turned the camera on his vest on, and began reciting a legal script at the weeping five-year-old.

“You’re trading without a licence, pursuant to x, y, z act and blah dah dah dah, really going through a script,” Spicer tells me, saying they showed no compassion for his daughter. “This is my job, I’m doing it and that’s it, basically.”

The girl burst into tears the moment they arrived.

“Officials have some degree of intimidation. I’m a grown adult, so I wasn’t super intimidated, but I was a bit shocked,” says Spicer. “But my daughter was intimidated. She started crying straight away.”

As they continued to recite their legalese, her father picked her up to try to comfort her – but that didn’t stop the officers giving her stall a £150 fine and handing them a penalty notice. “TRADING WITHOUT LICENCE,” it screamed.


Picture: André Spicer

“She was crying and repeating, ‘I’ve done a bad thing’,” says Spicer. “As we walked home, I had to try and convince her that it wasn’t her, it wasn’t her fault. It wasn’t her who had done something bad.”

She cried all the way home, and it wasn’t until she watched her favourite film, Brave, that she calmed down. It was then that Spicer suggested next time they would “do it all correctly”, get a permit, and set up another stand.

“No, I don’t want to, it’s a bit scary to do it again,” she replied. Her father hopes that “she’ll be able to get over it”, and that her enterprising spirit will return.

The Council has since apologised and cancelled the fine, and called on its officials to “show common sense and to use their powers sensibly”.

But Spicer felt “there’s a bigger principle here”, and wrote a piece for the Telegraph arguing that children in modern Britain are too restricted.

He would “absolutely” encourage his daughter to set up another stall, and “I’d encourage other people to go and do it as well. It’s a great way to spend a bit of time with the kids in the holidays, and they might learn something.”

A fitting reminder of the great life lesson: when life gives you a fixed penalty notice, make lemonade.

Anoosh Chakelian is senior writer at the New Statesman.