Why it is absurd for Cameron to claim that he and Cable are united

The PM and the Business Secretary are making diametrically opposed arguments on borrowing for growth.

There is no need to have "a fight" with Vince Cable because there is nothing to have a fight about. That was the argument David Cameron sought to make during the Q&A following his speech on the economy. He pointed out that Cable's New Statesman essay had been signed off by the Treasury (a decision Team Osborne may well now regret) and insisted that the Business Secretary was in full agreement with the government's economic policy. 

But as a close reading of both texts shows, the Prime Minister and the Business Secretary are making diametrically opposed arguments on borrowing for growth. Here are three key points of difference. 

Where Cameron and Cable disagree

1. Would higher borrowing threaten economic stability?

Cameron claimed that deficit-financed stimulus would "jeopardise" the nation’s finances by triggering a spike in interest rates. Cable said the reverse. Highlighting the long-term maturity of the UK's debt, he wrote that "we suffer less from the risks of a debt spiral, where refinancing maturing debt rapidly becomes impossible. Consequently, the effect on our fiscal situation of higher interest rates is in fact nowhere near as bad as having weak growth". 

2. Can borrowing for growth aid deficit reduction?

In his speech, Cameron ridiculed those who think "borrowing more money would mean borrowing less". But in his NS essay, Cable argued that borrowing to invest would not "undermine the central objective of reducing the structural deficit" (a measure that excludes capital spending) and could even assist it "by by reviving growth".

3. Can the government afford to spend more?

Cameron argued that was there no "magic money tree", insisting that the government could not afford to borrow to significantly increase spending. 

It was precisely this kind of economic fatalism that Cable took a razorblade to. He denounced as "absurd" the claim that capital spending could not be "greatly expanded" and attacked the "pessimists" who say "the central government is incapable of mobilising capital investment quickly". 

Borrowing for growth, he added (rather than imposing further cuts elsewhere), "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."

David Cameron delivers his speech on the economy during a visit to precision grinding engineers Kinetic Landis Ltd on March 7, 2013 in Keighley. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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How tribunal fees silenced low-paid workers: “it was more than I earned in a month”

The government was forced to scrap them after losing a Supreme Court case.

How much of a barrier were employment tribunal fees to low-paid workers? Ask Elaine Janes. “Bringing up six children, I didn’t have £20 spare. Every penny was spent on my children – £250 to me would have been a lot of money. My priorities would have been keeping a roof over my head.”

That fee – £250 – is what the government has been charging a woman who wants to challenge their employer, as Janes did, to pay them the same as men of a similar skills category. As for the £950 to pay for the actual hearing? “That’s probably more than I earned a month.”

Janes did go to a tribunal, but only because she was supported by Unison, her trade union. She has won her claim, although the final compensation is still being worked out. But it’s not just about the money. “It’s about justice, really,” she says. “I think everybody should be paid equally. I don’t see why a man who is doing the equivalent job to what I was doing should earn two to three times more than I was.” She believes that by setting a fee of £950, the government “wouldn’t have even begun to understand” how much it disempowered low-paid workers.

She has a point. The Taylor Review on working practices noted the sharp decline in tribunal cases after fees were introduced in 2013, and that the claimant could pay £1,200 upfront in fees, only to have their case dismissed on a technical point of their employment status. “We believe that this is unfair,” the report said. It added: "There can be no doubt that the introduction of fees has resulted in a significant reduction in the number of cases brought."

Now, the government has been forced to concede. On Wednesday, the Supreme Court ruled in favour of Unison’s argument that the government acted unlawfully in introducing the fees. The judges said fees were set so high, they had “a deterrent effect upon discrimination claims” and put off more genuine cases than the flimsy claims the government was trying to deter.

Shortly after the judgement, the Ministry of Justice said it would stop charging employment tribunal fees immediately and refund those who had paid. This bill could amount to £27m, according to Unison estimates. 

As for Janes, she hopes low-paid workers will feel more confident to challenge unfair work practices. “For people in the future it is good news,” she says. “It gives everybody the chance to make that claim.” 

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