Vince Cable urges greater capital spending

Vince Cable Speaks

Vince Cable has expressed "deep disappointment" at the coalition government's record on capital spending, in a move meant to increase pressure on George Osborne to inject further cash into infrastructure projects.

The business secretary said the government should refocus on 40 large-scale plans to invest in roads, railways, hospitals and universities in this month's budget and beyond.

His comments came as Lord Forsyth, the former Conservative minister and one-time adviser to Osborne, called for the chancellor to change course over the economy. Earlier Philip Hammond, the Tory defence secretary, called for defence spending cuts to be suspended in favour of further cuts in welfare.

Government sources said that the treasury is gearing up for a protracted tussle with ministers and backbenchers as the Budget approaches.

Forsyth, who has given advice to Osborne on tax policy, said that the time had come for a radical turn.

"I think what the Government has got to do is to set out a long-term, clear strategy, which is going to get Britain back to work and earning its way in the world again," he told Radio 4's The World This Weekend. "I think the Chancellor should spend less time talking about an age of austerity and more time explaining how we can get back to an age of prosperity," he added.

Cable and other senior Lib Dems are keen to express their different approach towards the economy amid a concern within the parliamentary party that Osborne's plans may not reap economic benefits before the next election.

Cable said on the BBC's Sunday Politics programme: "I think we should be doing a lot more capital spending and that's where the focus has got to be now."

Public investment has fallen from £50bn when the coalition in 2010 to £28bn, and will drop to £25bn next year and £22bn the year after.

Cable said this was not an adequate response to Britain's economic problems. "We need to do a lot more. This is the area where the government through the budget and subsequently now has to focus," he said.

A source close to Cable said his comments were not just another attempt by a cabinet minister to secure cash for his own department. "Vince is not just trying to defend his own turf. If we are talking about long-term growth then irrespective of who is the next business secretary, funding of science, skills and technologies is critical. This issue goes beyond the political cycle," the aide said.

Cable, who along with Hammond and the home secretary, Theresa May, has been said to be a member of the "National Union of Ministers" in the cabinet – those whose departments do not have protected budgets – also voiced his opposition to the government's policy of ringfencing health, overseas aid and education budgets.

Asked whether protecting these budgets was a policy he supported, Cable said: "I think in general it's not a good approach to public spending in the long run." He suggested there were universal benefits that could be cut further.

Last week David Cameron presided over a fractious cabinet meeting when the so-called NUM, led by May, voiced their anger at the expected cuts and failure to promote growth measures. Osborne is expected to announce a further round of cuts when he outlines a spending review for the 2015-16 financial year.

Former Tory chief whip Andrew Mitchell said the party had been "incredibly disciplined" in the aftermath of Eastleigh, but warned that the Budget later this month would be crucial.

"There is obviously a healthy debate on the Tory backbenches which will, I think, come to a head at the time of the Budget," he told BBC1's Sunday Politics programme.

Cable acknowledged the depth of problems facing the UK economy and accepted that the Liberal Democrats had mishandled the Lord Rennard allegations, saying the party did "not handle them well".

Another senior Liberal Democrat criticised Hammond for calling for further welfare cuts. Tim Farron, the president of the party, said such a move would be both unwise and immoral.

"At a time like this, to think it is more important to be investing in Trident [the nuclear deterrent] or something like that, rather than protecting people who are the least well-off in our society, that would be morally wrong as well as just economically stupid," he said.

Powered by Guardian.co.ukThis article was written by Rajeev Syal, for guardian.co.uk on Sunday 3rd March 2013 17.18 Europe/London

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