Cable pours cold water on Osborne's green shoots

After the Chancellor declared that Britain was "turning the corner", the Business Secretary warns against "complacency", generated by "a few quarters of good economic data."

One can always rely on Vince Cable to provide a dose of economic realism (as he did in his famous pre-Budget New Statesman piece) and after George Osborne's triumphalist speech on Monday, the coalition's wizened seer has intervened again. In a speech to a CBI conference today, he will say: 

The kind of growth we want won't simply emerge of its own volition. In fact, I see a number of dangers. One is complacency, generated by a few quarters of good economic data. Recovery will not be meaningful until we see strong and sustained business investment.

Osborne, by contrast, declared that Britain was "turning a corner" on the basis of just two consecutive quarters of growth. 

Labour, unsurprisingly, has been quick to note the marked difference in tone between the Chancellor and the Business Secretary. Shadow business secretary Chuka Umunna said: "This is an embarrassing slapdown to George Osborne’s deeply complacent and out of touch speech this week.

"But it also reminds everyone that you can’t trust a word the Lib Dems say. Vince Cable has supported the Chancellor’s policies which choked off the recovery in 2010. Three wasted years of flatlining that has left families worse off and done long term damage to our economy is his record and he should take responsibility for it."

In response, and three days before the Lib Dem conference opens in Glasgow, Cable is keen to put some clear yellow water between himself and Osborne, most notably on housing. While the Chancellor provided a robust defence of his Help To Buy scheme on Monday, Cable fears that the government is inflating demand without addressing the fundamental problem of supply. In his speech he will warn that "There are risks, not least the housing market getting out of control."

Cable has been angered by Osborne's refusal to accept his plan to allow councils to pool their borrowing limits in order to build more affordable houses. As he recently told the Social Liberal Forum: "What is stopping them? Frankly, Tory dogma. And the Tories are hiding behind Treasury methodology, saying that more borrowing by councils beyond permitted limits will break the fixed rules.

"So even though freeing up this borrowing space would result in tens of thousands more homes being built, and many times more jobs, they would rather start talking about the cuts they want to make, rather than the houses that we should build. That is the difference between Lib Dems and Tories on this matter."

Expect to hear much more about this in Glasgow, where Lib Dem delegates will vote on Cable's proposal. So long as Osborne continues to resist any reform, he risks being outflanked on an issue of increasing political significance. 

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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Forget the progressive alliance - it was the voters wot won it in Richmond

The Labour candidate on how voters have acted tactically for decades.

The Richmond Park by-election is both a triumph and a setback for the concept of an anti-Tory progressive alliance. As the Labour candidate, I was bombarded with emails and tweets saying I ought to stand down to prevent Zac Goldsmith being re-elected long after it was technically impossible for me to do so even if I had wanted to. I was harangued at a meeting organised by Compass, at which I found myself the lonely voice defending Labour's decision to put up a candidate.

I was slightly taken aback by the anger of some of those proposing the idea, but I did not stand for office expecting an easy ride. I told the meeting that while I liked the concept of a progressive alliance, I did not think that should mean standing down in favour of a completely unknown and inexperienced Lib Dem candidate, who had been selected without any reference to other parties. 

The Greens, relative newbies to the political scene, had less to lose than Labour, which still wants to be a national political party. Consequently, they told people to support the Lib Dems. This all passed off smoothly for a while, but when Caroline Lucas, the co-leader of the Greens came to Richmond to actively support the Lib Dems, it was more than some of her local party members could stomach. 

They wrote to the Guardian expressing support for my campaign, pointing out that I had a far better, long-established reputation as an environmentalist than the Lib Dem candidate. While clearly that ultimately did little to boost my vote, this episode highlighted one of the key problems about creating a progressive alliance. Keeping the various wings of the Labour party together, especially given the undisciplined approach of the leader who, as a backbencher, voted 428 times during the 13 years of Labour government in the 1990s and 2000s, is hard enough. Then consider trying to unite the left of the Greens with the right of the Lib Dems. That is not to include various others in this rainbow coalition such as nationalists and ultra-left groups. Herding cats seems easy by contrast.

In the end, however, the irony was that the people decided all by themselves. They left Labour in droves to vote out Goldsmith and express their opposition to Brexit. It was very noticeable in the last few days on the doorstep that the Lib Dems' relentless campaign was paying dividends. All credit to them for playing a good hand well. But it will not be easy for them to repeat this trick in other constituencies. 

The Lib Dems, therefore, did not need the progressive alliance. Labour supporters in Richmond have been voting tactically for decades. I lost count of the number of people who said to me that their instincts and values were to support Labour, but "around here it is a wasted vote". The most revealing statistic is that in the mayoral campaign, Sadiq Khan received 24 per cent of first preferences while Caroline Pidgeon, the Lib Dem candidate got just 7 per cent. If one discounts the fact that Khan was higher profile and had some personal support, this does still suggest that Labour’s real support in the area is around 20 per cent, enough to give the party second place in a good year and certainly to get some councillors elected.

There is also a complicating factor in the election process. I campaigned strongly on opposing Brexit and attacked Goldsmith over his support for welfare cuts, the bedroom tax and his outrageous mayoral campaign. By raising those issues, I helped undermine his support. If I had not stood for election, then perhaps a few voters may have kept on supporting him. One of my concerns about the idea of a progressive alliance is that it involves treating voters with disdain. The implication is that they are not clever enough to make up their mind or to understand the restrictions of the first past the post system. They are given less choice and less information, in a way that seems patronising, and smacks of the worst aspects of old-fashioned Fabianism.

Supporters of the progressive alliance will, therefore, have to overcome all these objections - in addition to practical ones such as negotiating the agreement of all the parties - before being able to implement the concept. 

Christian Wolmar is an award winning writer and broadcaster specialising in transport. He was shortlisted as a Labour mayoral candidate in the 2016 London election, and stood as Labour's candidate in the Richmond Park by-election in December 2016.