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.

Show Hide image

Michael Gove definitely didn't betray anyone, says Michael Gove

What's a disagreement among friends?

Michael Gove is certainly not a traitor and he thinks Theresa May is absolutely the best leader of the Conservative party.

That's according to the cast out Brexiteer, who told the BBC's World At One life on the back benches has given him the opportunity to reflect on his mistakes. 

He described Boris Johnson, his one-time Leave ally before he decided to run against him for leader, as "phenomenally talented". 

Asked whether he had betrayed Johnson with his surprise leadership bid, Gove protested: "I wouldn't say I stabbed him in the back."

Instead, "while I intially thought Boris was the right person to be Prime Minister", he later came to the conclusion "he wasn't the right person to be Prime Minister at that point".

As for campaigning against the then-PM David Cameron, he declared: "I absolutely reject the idea of betrayal." Instead, it was a "disagreement" among friends: "Disagreement among friends is always painful."

Gove, who up to July had been a government minister since 2010, also found time to praise the person in charge of hiring government ministers, Theresa May. 

He said: "With the benefit of hindsight and the opportunity to spend some time on the backbenches reflecting on some of the mistakes I've made and some of the judgements I've made, I actually think that Theresa is the right leader at the right time. 

"I think that someone who took the position she did during the referendum is very well placed both to unite the party and lead these negotiations effectively."

Gove, who told The Times he was shocked when Cameron resigned after the Brexit vote, had backed Johnson for leader.

However, at the last minute he announced his candidacy, and caused an infuriated Johnson to pull his own campaign. Gove received just 14 per cent of the vote in the final contest, compared to 60.5 per cent for May. 


Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.