Exclusive: Vince Cable calls on Osborne to change direction

Business Secretary argues in the New Statesman for "greatly expanded" capital spending and suggests that the Chancellor should borrow for growth.

In recent months, as the economy has continued to shrink and as borrowing has continued to rise, Vince Cable has become increasingly convinced of the need for a change of economic policy. With the Budget now just two weeks away, the Business Secretary has made his boldest intervention yet. In a 3,800 word essay for the New Statesman, Cable calls for "greatly expanded" capital spending and suggests that any increase should be funded through borrowing, not greater cuts elsewhere.

Ahead of a speech by David Cameron on the economy tomorrow, in which the Prime Minister will defend the government's strategy, he warns that Osborne's cuts to capital spending have had "economic consequences" and that the £5bn increase in last year's Autumn Statement was too "modest" to have any major effect. He adds: "one obvious question is why capital investment cannot now be greatly expanded. Pessimists say that government is incapable of mobilising capital investment quickly. But that is absurd: only five years ago the government was managing to build infrastructure, schools and hospitals at a level £20bn or more in 2009/10 than last year."

Cable then takes a significant step towards Labour's position by implying that the government should now borrow to invest.

The more controversial question is whether the government should not switch but should borrow more, at current very low interest rates, in order to finance more capital spending: building of schools and colleges; small road and rail projects; more prudential borrowing by councils for house building. This last is crucial to reviving an area which led economic recovery in the 1930s but is now severely depressed.

Such a programme would inject demand into the weakest sector of our economy – construction – and, at one remove, the manufacturing supply chain [cement, steel]. It would target two significant bottlenecks to growth: infrastructure and housing.

While maintaining that the coalition was right to adopt an aggressive deficit reduction plan in June 2010, he suggests that the "balance of risks" may have changed. 

When the government was formed it was in the context of febrile markets and worries about sovereign risk, at that stage in Greece but with the potential for contagion. As the country arguably most damaged by the banking crisis and with the largest fiscal deficit in the G20 there were good reasons to worry that the UK could lose the confidence of creditors without a credible plan for deficit reduction including an early demonstration of commitment. The main international agencies (the IMF, European Commission and OECD) and business groups stated that it judged the balance of risks correctly.

Almost three years later the question is whether the balance of risks has changed. 

He points to IMF research showing that the risk of losing market confidence as a result of higher borrowing may now be outweighed, in his words, by "the risk of public finances deteriorating as a consequence of continued lack of growth."

Osborne has consistently rejected calls to loosen fiscal policy but Cable argues that borrowing for growth "would not undermine the central objective of reducing the structural deficit" and may even assist it "by reviving growth". He notes that Britain's long-term debt maturity means it suffers "less from the risks of a debt spiral where refinancing maturing debt rapidly becomes impossible" and argues that "the effect on our fiscal situation of higher interest rates is in fact nowhere near as bad as having weak growth."

Constrained by collective ministerial responsibility, Cable ultimately concludes that the balance of risks remains "a matter of judgement", "which incorporates a political assessment of which risk is the least palatable". But his decision to reopen a debate long regarded as closed by Osborne shows his willingness to dissent from the Treasury line. With government unity already frayed ahead of next summer's Spending Review, the intervention will be viewed with hostility by Cable's cabinet colleagues. 

In a further act of provocation, the Business Secretary uses the essay to launch a withering dismissal of those Conservatives demanding greater deregulation of the labour market and a reduction in workers' rights. 

This bastardised ‘supply side’ economics often degenerates into a saloon bar whine about HSE inspectors, newts and birds which block new development, bloody minded workers, equalities and Eurocrats who dream up regulations for square tomatoes and straight bananas. Philosophical cover is provided by the belief that the private sector can always fill the space left by a retreating state.

In advance of Mark Carney's arrival as governor of the Bank of England in July, Cable also calls for more creative monetary policy, including the expansion of the Bank's quantitative easing programme to include private sector assets. He writes: "There is currently a pause in QE in the UK and two related ideas are being developed to sustain loose monetary policy. The first is for the Central Bank to acquire a wider range of assets from corporate loans to infrastructure project bonds. By taking risk off the private sector balance sheet, we encourage it to find new investments. This is surely sensible."

Cable says the Bank is right to consider targeting growth as well as inflation but adds that the stability provided by the current regime means "the bar for any change must be high."

Osborne, who characterises himself as a "fiscal conservative" but a "monetary activist", is likely to welcome Cable's intervention on this subject. But with the Chancellor already under pressure from Tory MPs to cut taxes, the Business Secretary's call for higher spending, potentially funded by higher borrowing, means he now faces a war on two fronts. 

Update: Shadow financial secretary to the Treasury Chris Leslie has responded for Labour. He said that Cable "may at last be seeing sense" but added: "he has consistently supported a failing economic policy which has led to stagnation, falling living standards, slashed investment in infrastructure and rising borrowing to pay for the mounting costs of economic failure."

"Labour, business groups and even the IMF have spent the last two years making the case for this. If Vince Cable is finally coming round to that view he needs to start winning the argument round the Cabinet table, but his words today read like they have been written by a Secretary of State who despite being in office, is not in power."

Business Secretary Vince Cable addresses delegates at the annual CBI conference in London on November 19, 2012. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Love a good box set? Then you should watch the Snooker World Championships

The game relies on a steady arm, which relies on a steady nerve. The result is a slow creeping tension needs time and space to be properly enjoyed and endured. 

People are lazy and people are impatient. This has always been so – just ask Moses or his rock – but as illustrated by kindly old Yahweh, in those days they could not simply answer those impulses and stroll on.

Nowadays, that is no longer so. Twitter, YouTube and listicles reflect a desire for complex and involved issues, expansive and nuanced sports – what we might term quality – to be condensed into easily digestible morsels for effort-free enjoyment.

There is, though, one notable exception to this trend: the box set. Pursuing a novelistic, literary sensibility, it credits its audience with the power of sentience and tells riveting stories slowly, unfolding things in whichever manner that it is best for them to unfold.

In the first episode of the first series of The Sopranos, we hear Tony demean his wife Carmela's irritation with him via the phrase “always with the drama”; in the seventh episode of the first series we see his mother do likewise to his father; and in the 21st and final episode of the sixth and final series, his son uses it on Carmela. It is precisely this richness and this care that makes The Sopranos not only the finest TV show ever made, but the finest artefact that contemporary society has to offer. It forces us to think, try and feel.

We have two principal methods of consuming art of this ilk - weekly episode, or week-long binge. The former allows for anticipation and contemplation, worthy pursuits both, but of an entirely different order to the immersion and obsession offered by the latter. Who, when watching the Wire, didn’t find themselves agreeing that trudat, it's time to reup the dishwasher salt, but we’ve run out, ain’t no thing. Losing yourself in another world is rare, likewise excitement at where your mind is going next.

In a sporting context, this can only be achieved via World Championship snooker. Because snooker is a simple, repetitive game, it is absorbing very quickly, its run of play faithfully reflected by the score.

But the Worlds are special. The first round is played over ten frames – as many as the final in the next most prestigious competition – and rather than the usual week, it lasts for 17 magical days, from morning until night. This bestows upon us the opportunity to, figuratively at least, put away our lives and concentrate. Of course, work and family still exist, but only in the context of the snooker and without anything like the same intensity. There is no joy on earth like watching the BBC’s shot of the championship compilation to discover that not only did you see most of them live, but that you have successfully predicted the shortlist.

It is true that people competing at anything provides compelling drama, emotion, pathos and bathos - the Olympics proves this every four years. But there is something uniquely nourishing about longform snooker, which is why it has sustained for decades without significant alteration.

The game relies on a steady arm, which relies on a steady nerve. The result is a slow creeping tension needs time and space to be properly enjoyed and endured. Most frequently, snooker is grouped with darts as a non-athletic sport, instead testing fine motor skills and the ability to calculate angles, velocity and forthcoming shots. However, its tempo and depth is more similar to Test cricket – except snooker trusts so much in its magnificence that it refuses to compromise the values which underpin it.

Alfred Hitchcock once explained that if two people are talking and a bomb explodes without warning, it constitutes surprise; but if two people are talking and all the while a ticking bomb is visible under the table, it constitutes suspense. “In these conditions,” he said, “The same innocuous conversation becomes fascinating because the public is participating in the scene. The audience is longing to warn the characters on the screen: ‘You shouldn't be talking about such trivial matters. There is a bomb beneath you and it is about to explode!’”

Such is snooker. In more or less every break, there will at some point be at least one difficult shot, loss of position or bad contact – and there will always be pressure. Add to that the broken flow of things – time spent waiting for the balls to stop, time spent prowling around the table, time spent sizing up the table, time spent cleaning the white, time spent waiting for a turn – and the ability for things to go wrong is constantly in contemplation.

All the more so in Sheffield’s Crucible Theatre. This venue, in its 40th year of hosting the competition, is elemental to its success. Place is crucial to storytelling, and even the word “Crucible” – whether “a ceramic or metal container in which metals or other substances may be melted or subjected to very high temperatures,” “a situation of severe trial”, or Arthur Miller’s searing play – conjures images of destruction, injustice and nakedness. And the actual Crucible is perhaps the most atmospheric arena in sport - intimate, quiet, and home to a legendarily knowledgeable audience, able to calculate when a player has secured a frame simply by listening to commentary through an earpiece and applauding as soon as the information is communicated to them.

To temper the stress, snooker is also something incredibly comforting. This is partly rooted in its scheduling. Working day and late-night sport is illicit and conspiratorial, while its presence in revision season has entire cohorts committing to “just one more quick frame”, and “just one more quick spliff”. But most powerfully of all, world championship snooker triggers memory and nostalgia, a rare example of something that hasn’t changed, as captivating now as it was in childhood.

This wistfulness is complemented by sensory pleasure of the lushest order. The colours of both baize and balls are the brightest, most engaging iterations imaginable, while the click of cue on ball, the clunk of ball on ball and the clack of ball on pocket is deep and musical; omnipresent and predictable, they combine for a soundtrack that one might play to a baby in the womb, instead of whale music or Megadeth.

Repeating rhythms are also set by the commentators, former players of many years standing. As is natural with extended coverage of repetitive-action games, there are numerous phrases that recur:

“We all love these tactical frames, but the players are so good nowadays that one mistake and your opponent’s in, so here he is, looking to win the frame at one visit ... and it’s there, right in the heart of the pocket for frame and match! But where’s the cue ball going! it really is amazing what can happen in the game of snooker, especially when we’re down to this one-table situation.”

But as omniscient narrators, the same men also provide actual insight, alerting us to options and eventualities of which we would otherwise be ignorant. Snooker is a simple game but geometry and physics are complicated, so an expert eye is required to explain them intelligibly; it is done with a winning combination of levity and sincerity.

The only essential way in which snooker is different is the standard of play. The first round of this year’s draw featured eight past winners, only two of whom have made it to the last four, and there were three second-round games that were plausible finals.

And just as literary fiction is as much about character as plot, so too is snooker. Nothing makes you feel you know someone like studying them over years at moments of elation and desolation, pressure and release, punctuated by TV confessions of guilty pleasures, such as foot massages, and bucket list contents, such as naked bungee jumping.

It is probably true that there are not as many “characters” in the game as once there were, but there are just as many characters, all of whom are part of that tradition. And because players play throughout their adult life, able to establish their personalities, in unforgiving close-up, over a number of years, they need not be bombastic to tell compelling stories, growing and undergoing change in the same way as Dorothea Brooke or Paulie Gualtieri.

Of no one is this more evident that Ding Junhui, runner-up last year and current semi-finalist this; though he is only 30, we have been watching him almost half his life. In 2007, he reached the final of the Masters tournament, in which he faced Ronnie O’Sullivan, the most naturally talented player ever to pick up a cue – TMNTPETPUAC for short. The crowd were, to be charitable, being boisterous, and to be honest, being pricks, and at the same time, O’Sullivan was playing monumentally well. So at the mid-session interval, Ding left the arena in tears and O’Sullivan took his arm in consolation; then when Ding beat O’Sullivan in this year’s quarter-final, he rested his head on O’Sullivan’s shoulder and exchanged words of encouragement for words of respect. It was beautiful, it was particular, and it was snooker.

Currently, Ding trails Mark Selby, the “Jester from Leicester” – a lucky escape, considering other rhyming nouns - in their best of 33 encounter. Given a champion poised to move from defending to dominant, the likelihood is that Ding will remain the best player never to win the game’s biggest prize for another year.

Meanwhile, the other semi-final pits Barry Hawkins, a finalist in 2013, against John Higgins, an undisputed great and three-time champion. Higgins looks likely to progress, and though whoever wins through will be an outsider, both are eminently capable of taking the title. Which is to say that, this weekend, Planet Earth has no entertainment more thrilling, challenging and enriching than events at the Crucible Theatre, Sheffield.

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