In an article in the New Statesman Vince Cable has conceded that debt-funded investment in infrastructure “may assist in reviving growth”.
In an article for the New Statesman Vince Cable has conceded that debt-funded investment in infrastructure “may assist in reviving growth”.
In a challenge to George Osborne’s economic plan of fiscal contraction, the business secretary states that it is “absurd” to suggest spending cannot be greatly expanded to “target two significant bottlenecks to growth: infrastructure and housing” and “inject demand into the weakest sector of our economy – construction”.
Cable argues that it is a perfect time to exploit record low interest rates by borrowing “in order to finance more capital spending: building of schools and colleges; small road and rail projects.”
His words follow yesterday’s halving of GDP growth figures by the Chamber of Commerce for this year to 0.6 per cent, while also cutting its predictions for 2014, underlining the need for a change of economic policy.
The business secretaries comments will be a thorn in the side of the prime minister who is expected to make a speech today advocating that the government “stick to the course” on austerity despite there being virtually no growth since the economic plan was put into practice.
Labour says Cable is finally “seeing sense” about the “economic consequences to deep cuts to capital investment” ,while the Tories insist that more borrowing would likely reduce market confidence in the British economy.
However, Cable maintains that the danger of slow growth is more pressing than a rectifiable loss of market confidence, adding that “nobody knows how the market may respond.”
The business secretary is the boldest cabinet minister to come out and dispute the governments failing economic policy and suggest an alternative – let’s hope he can persuade his sensible Tory colleagues.
Left Foot Forward reported earlier today that British workers have suffered the biggest fall in the value of their wages of any of the world’s wealthiest countries.Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.