Business Secretary Vince Cable has refused to rule out a second financial crash and issued a stark warning that Britain could face a Japan-style lost decade of stagnant growth.
The euro-zone crisis, combined with the stalling of major economies, means the world is in "very dangerous terrain", he told a fringe event at the Liberal Democrat conference in Birmingham.
The comments followed the Cabinet minister's keynote speech, in which he insisted the Government needed to wage the "economic equivalent of war" on the downturn.
Invoking the example of Winston Churchill's coalition against the Nazis, he said: "You could say: that was war, that's different.
"Yes, it is different. But we now face a crisis that is the economic equivalent of war. This is not a time for business as usual, or politics as usual."
Mr Cable went further last night, raising concerns that the UK could suffer a spell in the economic doldrums like Japan in the 1990s.
The prospect of a second financial crash could not be ruled out, although he stressed that was not a "mainstream probability".
"What could happen? The optimistic view is we get our public finances in order, we do what is beginning to become apparent, which is we rebalance towards manufacturing, exports, investment, green technology... and (there is) quite a lot of evidence that some of those things are happening."
But he went on: "There is, increasingly, a kind of middle-level scenario which says 'well, actually it's much more difficult than that and this problem is going to linger for some years' - kind of the Japan story, possibly.
"It's possible. I'm not saying it's likely but it could happen. And of course the people who really want to frighten themselves think that there could be another financial crisis as well.
"We hope not, but it could happen if something goes badly wrong with the whole of the euro-zone and not just Greece - Greece is a very small country - but with Italy and Spain, and this affects the banks' assets in those countries and goes through our system, particularly in Ireland.
"All kind of things could happen but I think that's a tail risk, I don't think that's a mainstream probability."
Mr Cable said Europe was in an "existential crisis" and "as the European party, it's down to us as much as anybody to say 'well, how the hell do we get out of this? How do we relate to this thing?'. We can't just sit as bystanders."
He insisted there should be no "backward movement" by Britain from ties with the EU. Despite spelling out such disastrous scenarios and stressing the need for the coalition to work together "in the national interest", Mr Cable delivered a series of stinging jibes against Tory colleagues.
Those targeted in his speech included Communities Secretary Eric Pickles and David Cameron's policy guru Steve Hilton.
Conservative calls for the 50p top rate tax to be axed were "childish fantasy" that would fail to attract back British billionaires from their Caribbean bolt-holes, he said.
He also blamed his coalition partners for a failure to rein in bankers' bonuses. Party leader Nick Clegg put in a tetchy performance at a question and answer session with members.
Attempting to quell lingering hostility to the power-sharing deal, he urged activists to stop "beating themselves up" over it.
He dismissed critics who accused him of being a traitor or betraying Lib Dem principles as "ridiculous". Instead they should applaud him for putting national interest ahead of narrow political advantage.
He insisted that working together in coalition did not mean Lib Dems had to avoid being "rude" about the Tories at conference.
Today Chris Huhne will take to the conference platform to announce a crackdown on the biggest energy companies and pledge to help customers save cash.
In a keynote speech to Liberal Democrat activists, he will say ministers are poised to order energy suppliers to pay customers unlimited refunds to compensate for "bad behaviour".
He will also unveil tough new powers for energy watchdog Ofgem that will allow it to stop companies blocking reforms.
"We are determined to get tough with the big six energy companies to ensure that the consumer gets the best possible deal," he will say.
"We want simpler tariffs. Requiring energy companies to tell you whether you could buy more cheaply on another tariff. And you could save real money.
"I want to help households save money, simpler charging, clearer bills, quicker switching and more consumer-friendly firms - co-ops, partnerships, consumer charities - dedicated to doing the shopping around for consumers to make sure that you are always on the best deal, even if you do not have time to check yourself.
"I believe Ofgem should have new powers to secure redress for consumers - money back for bad behaviour - and we will stop the energy companies from blocking action by Ofgem, which can delay matters by a year."
Courtesy of London Evening Standard http://www.thisislondon.co.uk/standard/
No comments:
Post a Comment