Cable slapped down by Number 10 over Help to Buy warning

Mr Cable questioned whether the second part of the scheme – providing government guarantees for low-deposit mortgages – should go ahead as planned in January.

“We should certainly think about how it should come into effect, indeed whether it should come into effect, in the light of changing market conditions. We don’t want a new housing bubble,” Mr Cable told Sky News.

But he was slapped down by the Prime Minister’s official spokesman who said there were no plans to change it.

“It will be launched,” the spokesman said. We are faced with a situation – because of the fall in availability of 90 to 95 per cent loan-to-value mortgages – where many first-time buyers are faced with a real obstacle to making a home of their own. It is important we address this issue.”

Mr Cable’s intervention came as he sounded a warning over the dangers of complacency on Britain’s economic recovery, insisting ministers “can’t rest on our laurels”.

Two days after Mr Osborne said the economy was finally “turning a corner”, Mr Cable used a keynote speech to business leaders to say “a few quarters of good economic data” did not mean the country was out of the woods.

His comments are likely to revive old tensions with the Chancellor with whom he has clashed in the past. However, it will also be seen as a piece of political positioning ahead of the party conference season.

In his address to a joint Government/CBI industrial strategy conference at Warwick University, the Lib Dem Business Secretary said that while there were “encouraging” signs for the economy, there was further to go.