Cable rebuffs Labour’s overtures with a laugh

Mr Balls said he wanted to join forces with “sensible people in the Government” – singling out the senior Liberal Democrat and giving renewed backing to the “mansion tax” championed by Mr Cable.

The pair appeared on BBC’s Marr programme together yesterday after Mr Balls, MP for Morley and Outwood, warned in an article for the Sunday Mirror: “The country cannot afford to wait until the next election before we get a change of course because the longer Ministers refuse to act, the more long-term damage will be done to our economy.”

The entreaties come after the new Tory Minister Michael Fallon, brought into the Business Department in David Cameron’s reshuffle, signalled his intent to follow more right-wing, Thatcherite economic policies.

In what will be seen as a shot across the bows of the Business Secretary, Mr Fallon said it was vital to “salute” wealth creation “and stop thinking of new ways to tax it”.

And he told the Sunday Telegraph he would champion the scrapping of up to 3,000 regulations, a sell-off of Royal Mail and moves to make it easier to sack underperforming staff.

The installation of Mr Fallon and close George Osborne ally Matthew Hancock under Mr Cable was regarded as a bid to restrain the Liberal Democrat, regarded by some Tories as being anti-business, while also appeasing Tory critics.

Mr Fallon said he would push traditional Tory values in his new role, including radical changes to employment law such as a “no-fault dismissal” proposal opposed by Mr Cable.

“Above all I want business to feel it has a strong Conservative champion in the department,” he said.

Mr Cable laughed off Mr Balls’s offer, describing it as ‘flattery’, but insisted while he considered himself a centre-left politician and enjoyed “chemistry” with some Labour figures, he was able to deal with Tory Ministerial colleagues “in an equally businesslike way”.

Asked about Mr Fallon’s promised bonfire of regulations, he said it would only happen if it could be done “in a rational way” and without badly downgrading protection for employees and the environment.

And he suggested that the main focus should be on immigration and tax.