Business secretary delivers speech to Liberal Democrat conference following barrage of negative reaction to elements of the address released last night.
Vince Cable today went ahead with his critique on the "murky" world of high finance, setting out how he believes "capitalism kills competition" despite a backlash against pre-briefed elements of the speech.
The business secretary received applause as he delivered the speech to the Liberal Democrat conference in Liverpool and for announcing a distinctively Lib Dem solution to the thorny policy problem of modernising the Royal Mail, an issue grappled with by successive governments.
Cable said he would be bringing forward legislation in the autumn to sell off a portion of the Royal Mail, but also to hand over a significant chunk of the service to employees – at least 10% – in an attempt to inject capital into the service but also to counterbalance the partial sell-off with more say for the company's workers.
The business secretary said this was the largest handover to employees attempted in the UK ever, but the plans were immediately attacked by unions as "deeply patronising".
Cable delivered his speech in the face of negative reaction from many sides – including from some elements within his own party – to elements of the speech that were pre-briefed yesterday.
After some dubbed his comments on capitalism "Marxist", Cable made delegates laugh by addressing them as "comrades".
He acknowledged to activists that he had caused controversy with both this morning's coverage and also with other measures he had taken in his four months as business secretary.
He said he had "managed to infuriate bank bosses, acquire a fatwa from the revolutionary guards of the trade unions movement; frighten the Daily Telegraph ... and upset very rich people. I must be doing something right."
He went on: "On banks, I make no apology for attacking spivs and gamblers who did more harm to the British economy than Bob Crow [general secretary of the RMT union] could achieve in his wildest Trotskyite fantasies, while paying themselves outrageous bonuses underwritten by the taxpayer."
He delivered the key section of the speech unchanged from the version released yesterday: "We need successful business. But let me quite clear. The government's agenda is not one of laissez faire. Markets are often irrational or rigged. So I am shining a harsh light into the murky world of corporate behaviour.
"Why should good companies be destroyed by short-term investors looking for a speculative killing, while their accomplices in the City make fat fees? Capitalism takes no prisoners and it kills competition where it can, as Adam Smith explained over 200 years ago," he said to applause.
"I want to protect consumers and keep prices down and provide a level playing field for small business. So we must be vigilant right across the economy – whether in the old industries of economics textbooks or the newer privatised utilities and cosy magic circles in auditing, law or investment banking. Competition is central to my pro-market, pro-business agenda."
His speech helped soothe Lib Dem activists on the final day of conference as they return home reminded of the distinctive agendas of some of their number within government.
Striking a different note from his party leader, Nick Clegg, who stresses deep ideological links with the Tories, Cable said: "Aren't you having fun, people ask. It isn't much fun but it's necessary: necessary for our country that our parties work together at a time of financial crisis. And it is an opportunity for the party to demonstrate that we have political maturity to make difficult decisions."
There were also reassuring words on the independence of the party: "We will fight the next general election as an independent force with our options open. Just like 2010. But coalition is the future of politics. It is good for government and good for Britain. We must make sure it's good for the Lib Dems as well.
"We have punched above our weight in government because we have a democratic party which has clear principles and policies."
He described Labour's current position as "infantile" and returned to the controversial subject of deficit reduction, on which the opposition is intent on making Lib Dems wriggle. The party argued for a slower pace of reduction during the election campaign.
"In an emergency it was right to accept large-scale deficit financing," the business secretary said. "But the deficit must now be corrected. Public spending was ramped up using tax windfalls which have gone. We are a poorer country than two years ago and the budget must reflect what we can afford."
He said of the Labour party: "They demand a plan B but don't have a plan A. The only tough choice they will face is which Miliband," a reference to the leading Labour leadership candidates, David and Ed Miliband.
Cable's speech was also classically candid, admitting he personally regretted not being able to secure a mention of the Lib Dem manifesto pledge to bring in a mansion tax in the two parties' coalition agreement.
Cable then sought to get on the front foot with an announcement on the Royal Mail. He said: "I want to announce today that employees in Royal Mail will benefit from the largest employee shares scheme of any privatisation for 25 years. The Lib Dems were the first and only party to call for an employee stake and we are now implementing it in government." He added: "The Post Office is not for sale. There will be no programme of closures as there were under Labour."
The government will also announce a consultation of takeovers and executive pay. It will examine whether shareholders can have a greater say in the company's strategy and whether clarification is needed of the Companies Act 2006 allowing directors to have more information about takeovers.
The proposal was immediately criticised by Billy Hayes, the general secretary of the Communication Workers' Union. He said: "Any offer of shares to employees is deeply patronising for people who have invested their working lives to a public service. The public currently owns 100% of the Royal Mail but the government wants to sell 90% to the very people who got this country into financial crisis." Hayes said a recent opinion poll commissioned by the union showed that two-thirds of Lib Dem voters wanted the Royal Mail to remain publicly owned.
Crow responded to Cable's "Trotskyite" jibe, saying: "I'm not surprised that Vince Cable has chosen to attack me and the trade union movement because he knows that we will be the main point of resistance to his government's savage assault on jobs, living standards and public services."
This morning Cable was criticised by Lord Jones, the former trade minister and CBI director general, as well as Jones's successor at the CBI, Richard Lambert, who said the speech was "harsh". Meanwhile, Sir Menzies Campbell, the former Lib Dem leader, said Cable's words were "not the language" he would have used.
Copyright Speakers Corner 2016