Cable warns that cuts are having a "severe" effect on public services

The Business Secretary contradicts Cameron's claim that you can do "more with less" and says "some very good services are being seriously affected".

David Cameron and George Osborne have recently argued that austerity has proved that the state can do "more with less", with the quality of public services unaffected by the cuts. But on The Andrew Marr Show this morning, Vince Cable directly contradicted this claim. He warned that the pressure on services from the cuts was becoming "severe" and that "some very good services are now being seriously affected". He added: "I am concerned about the social fabric".

Cable was replying to a question on the IFS's warning that £12bn of further tax rises or welfare cuts will be required merely to maintain cuts at their current pace. In response, he reaffirmed the Lib Dems' commitment to a mansion tax (replying "yes" when asked if it was a "red line") but refused to comment on whether income tax would need to rise. With amusing understatement, he said that the abolition of the 50p tax rate had "not been a great political success" but that he was not in favour of restoring it. For Labour and the Lib Dems, in particular, the question of how they will plug the fiscal gap is going to become more insistent as the election draws closer (George Osborne has said that he would reduce welfare spending by "billions" in order to limit cuts to departments).

Elsewhere in the interview, Cable warned that the government "needed to look again" at Help to Buy and the "house price boom" it was fuelling, denounced "ridiculously tight" visa restrictions and compared the current panic over immigration to "Enoch Powell and 'rivers of blood'". He said: "The responsibility of politicians in this situation when people are getting anxious is to try to reassure them and give them facts and not panic and resort to populist measures that do harm." It was one of those occasions when it is easy to forget that Cable is a serving member of the government.

Vince Cable speaks at the Liberal Democrat conference in Glasgow earlier this year. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
Show Hide image

Can Philip Hammond save the Conservatives from public anger at their DUP deal?

The Chancellor has the wriggle room to get close to the DUP's spending increase – but emotion matters more than facts in politics.

The magic money tree exists, and it is growing in Northern Ireland. That’s the attack line that Labour will throw at Theresa May in the wake of her £1bn deal with the DUP to keep her party in office.

It’s worth noting that while £1bn is a big deal in terms of Northern Ireland’s budget – just a touch under £10bn in 2016/17 – as far as the total expenditure of the British government goes, it’s peanuts.

The British government spent £778bn last year – we’re talking about spending an amount of money in Northern Ireland over the course of two years that the NHS loses in pen theft over the course of one in England. To match the increase in relative terms, you’d be looking at a £35bn increase in spending.

But, of course, political arguments are about gut instinct rather than actual numbers. The perception that the streets of Antrim are being paved by gold while the public realm in England, Scotland and Wales falls into disrepair is a real danger to the Conservatives.

But the good news for them is that last year Philip Hammond tweaked his targets to give himself greater headroom in case of a Brexit shock. Now the Tories have experienced a shock of a different kind – a Corbyn shock. That shock was partly due to the Labour leader’s good campaign and May’s bad campaign, but it was also powered by anger at cuts to schools and anger among NHS workers at Jeremy Hunt’s stewardship of the NHS. Conservative MPs have already made it clear to May that the party must not go to the country again while defending cuts to school spending.

Hammond can get to slightly under that £35bn and still stick to his targets. That will mean that the DUP still get to rave about their higher-than-average increase, while avoiding another election in which cuts to schools are front-and-centre. But whether that deprives Labour of their “cuts for you, but not for them” attack line is another question entirely. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

0800 7318496