Hire-and-fire-law ‘head bangers’ and super-rich in Cable’s sights

The Yorkshire-born Business Secretary used his keynote address at the Lib Dem party conference to call for new taxes on the rich and a “demand stimulus” for the UK economy as he set out a vision for a post-2015 coalition government with “Liberal Democrats at its heart”.

Mr Cable, seen as the most likely successor to Nick Clegg as Lib Dem leader, delighted the party faithful with an attack on Conservative “head bangers” who are pushing for a relaxation of hire-and-fire rules – a measure he dismissed as “totally irrelevant” to aiding recovery.

Instead, in a clear shot across the bows of those on the Tory Right calling for further supply-side reform, the Business Secretary said a “demand stimulus” is now required to kick-start the British economy.

Mr Cable confirmed plans for a £1bn British Business Bank to support lending to small businesses and said quantitative easing has failed to revive the economy – calling for more public spending to drag Britain out of recession.

“I make no apology for my continued support for fiscal discipline,” he said. “But right now we are fighting recession. The need is for a demand stimulus. And that does not just mean pumping more money into the banks.

“That great Liberal Keynes had exactly the right analysis of the problem we now have – not enough spending power in the economy.”

In a further attack on the Tory Right, Mr Cable revived calls for a “mansion tax” on expensive properties, a measure he said had public support and would be more effective than simply hiking the top rate of income tax.

“We know that very high marginal rates of income tax are counter-productive,” he said. “A ‘mansion tax’… (is) core Lib Dem policy. A first step to the proper taxation of wealth and land. It horrifies the Tory backwoodsmen but it is popular and right.

“The super-rich can’t move their chateaux to Monaco or Switzerland – so let’s get on with it and tax them here.”

His toughest words against Conservative right-wingers, however, were saved for those calling for full implementation of the Beecroft report, which called for a massive relaxation of employment laws to help business.

Mr Cable said: “We have seen off the ‘head bangers’ who want a hire and fire culture, and seem to find sacking people an aphrodisiac – totally irrelevant in a country with flexible labour markets which have created over a million private sector jobs in the last two years.”

He also had strong words for Labour, a party which he said had lost its “soul” during 13 years in Government. Referring to Labour’s success over the past two years in toppling Lib Dem-led councils in cities including Sheffield and Hull, he said: “We know from their union-funded campaigns against us in Northern cities that Labour can still be a ruthless political machine.

“But it used to be a lot more than that – it once had a soul and new ideas.”

Nonetheless, Mr Cable defended his right to swap text messages with senior Labour figures, stating: “Many of the decisions we face – on banks, industrial strategy, climate change – go way beyond the limitations of one party or one parliament.

“That’s why I make sure that I have good communications with politicians across the political spectrum.”