July 20, 2012 7:33 pm

Vince Cable’s next move

After his ‘declaration of war’ on Rupert Murdoch, Vince Cable’s days seemed to be numbered. Yet, the scourge of the banks and boardroom greed is back
Vince Cable at the 2012 Farnborough Airshow©Charlie Bibby

Vince Cable on a wet walkabout at the 2012 Farnborough Airshow: “I believe in the government having an active role in the economy”

Vince Cable is chatting to car workers amid the antiseptic industrial efficiency of BMW’s Mini production line and something immediately catches the eye: he is a big man, yet he has the posture of a dancer. Leaning slightly backwards, hands behind his back, a foot pointed delicately forwards. “I’m learning a fancy rumba,” Britain’s most celebrated political ballroom-mover later confides.

But perhaps there is more to it: it is almost as if Cable has rediscovered his political poise, after a journey that saw St Vince – the sage of the global crash – stumble through a painful first few months as business secretary to the verge of the sack after he “declared war” on Rupert Murdoch in the presence of two undercover female reporters.

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Most politicians expect to grow in stature when they acquire the trappings of ministerial office: Cable, by contrast, seemed diminished, as he descended from the Olympian heights of economic punditry to begin a ministerial career. Forced to make big budget cuts and to hike university tuition fees (something he promised not to do in opposition) he was constrained by bureaucracy, a powerful Treasury and the need to work with the Conservatives – a party that had “always been my opponents”.

He seems hurt at the suggestion that he shrunk in office: “That’s a rather unkind way of putting it,” he says. Yet Cable often seemed under siege; his attacks on City “spivs”, the Murdoch empire and greed in the boardroom were fine for an opposition politician, but were proof to his critics that he was a “socialist” unsuited to be business secretary. After his Murdoch indiscretions in December 2010 – at the time he was overseeing News Corp’s bid for BSkyB – it seemed only a matter of time before the minister, now aged 69, was sacked.

Not any more. The Murdoch phone-hacking scandal, the “shareholder spring” uprising against excessive boardroom pay and a series of banking scandals have all reinforced the business secretary’s reputation for telling uncomfortable economic truths. The minister’s production line poise tells its own story: Vince Cable is back.

A recent survey of Liberal Democrat activists gave him an 80 per cent approval rating, a statistic Cable jokingly describes as “North Korean” in scale. As relations with the Tories sour, the avowedly “leftie” Cable is a key figure as his party looks to life beyond the coalition, possibly to a future in government with Labour.

Does he regret tangling with the Murdochs? “I did at the time, but it’s turned out satisfactorily,” he deadpans. What about the bankers? “I mean, in general these guys are vastly overpaid.” Does he worry that they might up sticks and move abroad if the banker bashing continues? “Nobody believes a word they say because they just use this argument constantly and it’s not credible.”

During the course of two days in his company, it becomes clear that an almost compulsive political drive is far from exhausted. Should a vacancy arise for the leadership of his party, might he be a candidate? “I wouldn’t exclude it,” he replies in his flat, nasal tones.

The idea of a septuagenarian leading the party will seem implausible to many at Westminster, not least since Cable was deemed too old for the job by many of his Lib Dem colleagues in 2007, after the humiliating – some would say ageist – treatment handed out by the media to the venerable former leader Sir Menzies Campbell.

Cable concluded in 2007 that he would not be “competitive” against a younger field of Nick Clegg and Chris Huhne, even though he had done a good job as stand-in leader. He says the party chose well in Clegg and the leadership is not even on his radar. But he observes: “The worship of youth has diminished – perhaps generally – in recent years.” Why? “Perhaps there is a certain respect for people who have had some insight into what’s going on.” 

. . .

We meet at 7.30am on an overcast Monday morning at BMW’s sprawling Mini plant outside Oxford, the start of another intense week for the business secretary. Vince Cable is snuffling with a cold, a regular affliction which friends say he brings upon himself because of an excessive workload. His second wife, Rachel, refers to the T-word – tiredness – but Cable insists that older people need less sleep.

He chats easily to apprentices and to BMW’s German executives, whose company is investing another £250m in its UK production. The visit – and Tuesday’s excursion to meet the aerospace sector at the Farnborough Airshow – is intended to highlight Cable’s vision of Britain’s industrial future; a strategic partnership between the state and private sector intended to tilt the economy away from an overheated City towards high-tech manufacturing and tradeable goods.

But there is another purpose. Cable is often portrayed by Tory MPs as “the anti-business secretary”, a 1970s leftwing throwback with an instinctive distrust of the corporate world. It is an image he wants to shed.

That perception was reinforced by a 2010 conference speech when Cable attacked hostile takeovers and denounced City “spivs and gamblers”. The CBI employers’ federation asked Cable to explain his alternative to capitalism and David Cameron, prime minister, sighed wearily: “Vince is Vince.”

Like two other iconic British politicians – London mayors Boris Johnson and Ken Livingstone – Cable holds the rare distinction of being identifiable by his first name alone. But who exactly is Vince?

Michael Gove, a Tory cabinet colleague, calls him “a magnificent one-off”, adding: “There aren’t many people who were Labour councillors in Glasgow who can make the case for free market economics with authority.” Cable is an academic former chief economist at Shell, but connects directly with ordinary voters. On the way back from Oxford, a young ticket collector nervously approaches him on the platform and says: “I respect you man.”

Born to upwardly mobile working-class parents in York amid the smell of cocoa of the Terry’s chocolate factory and the grease of the railway works, Cable flirted with the Liberal party at Cambridge university but ended up joining Labour, drawn to the party by its modernising leader Harold Wilson.

The late 1960s and early 1970s shaped the internationalist, free market but left-leaning views that inform his politics today, including a spell in an advisory job with the Kenyan government, where he became a zealous advocate of free trade.

Vince Cable with Olympia on their wedding day, Nairobi, July 1968

With Olympia on their wedding day, Nairobi, July 1968

During this period Cable’s socially liberal views took shape – notably after his encounter with Olympia, his Kenyan-born first wife (and mother of his three children), while they were both working as nurses at a York mental hospital. The “mixed” marriage was disowned by both sets of parents, an episode recalled in searing detail in the minister’s memoirs as he describes the collapse in relations with his “bigoted” father Len.

Cable’s social democratic instincts were honed as a Labour councillor in an impoverished Glasgow ward. After a spell working as a ministerial adviser to John Smith (later Labour’s leader), Cable became disillusioned as the party veered to the left; in the schism of 1981 he joined the newly formed soft-left Social Democratic Party which in turn merged with the Liberals in 1988.

His time in Kenya and later India confirmed his belief that free trade and labour mobility bring benefits to all. Although he accepts the need for controls, he rails against those in government who say immigration should only be for “the brightest and the best” and has fought some of his biggest battles in government against Conservatives demanding much tougher migration limits.

Cable also became a passionate supporter of further education, a ladder to opportunity exploited by his father (who became a teacher in a college building department) and his mother, who enrolled in college after she suffered a breakdown after having her second child. “It lifted her up and helped her get her self-confidence back,” he says.

Olympia, who died of cancer in 2001, was the first of two strong women in Cable’s life. “She would let me watch Match of the Day if I did the ironing at the same time,” the minister jokes. Rachel, the second, keeps horses in the New Forest. Today Cable wears two wedding bands on his finger.

Vince Cable with Shirley Williams©Courtesy of Vince Cable

In York with Shirley Williams for an SDP rally, 1983

Cable also likes working with strong women. Four out of five of Cable’s private secretaries are female, and when he recently held a meeting to discuss curbs on excessive pay in Britain’s male-dominated boardrooms, four out of the six advisers in the room were women.

Cable says he does not have a deliberate policy of employing female staff, but adds: “I’ve always been comfortable working with women and I’ve had two happy marriages. Draw what conclusions you like from that.”

But the aspect of Cable’s early life that unsettles business most is his incarnation as a Labour adviser in the dark days of corporatism and beer and sandwiches with the trade unions. According to Adrian Beecroft, the Tory venture capitalist who wrote a contentious report on radical labour law reform for Cameron, Cable “is a socialist who found a home in the Lib Dems”. Beecroft added: “I think people find it very odd that he’s in charge of business and yet appears to do very little to support business.”

For the Tories, Cable’s opposition to the Beecroft plan to allow bosses to fire workers at will in exchange for compensation was the final straw. For the business secretary the row symbolised the ideological idiocy of the “macho right”, which was pushing a policy which attracted only limited support in the business community. In the end Cable reformed industrial tribunals – something demanded by smaller companies – and averted a showdown with the unions.

“I am a bit of a lefty on some issues,” Cable confirms, but he says he combines it with a Scandinavian or Canadian belief in being “very open, operating within world markets, not protectionist”. He also endorses George Osborne’s tough plan to correct Britain’s budget deficit, even if he believes more can be done to get capital projects going within the fiscal framework, something he calls “Plan A plus”.

But he says: “I clearly believe a lot more than some of my coalition colleagues – Tories – in redistribution and using the tax system for that purpose. I also believe in the government having an active role in the economy, which is having an industrial strategy. I’m not a believer in laisser-faire.” The policy is not dissimilar to that pursued by Lord Mandelson, his Labour predecessor, and he admits it would be “dishonest” to pretend otherwise.

Indeed, Cable’s Tory detractors know very well that the business secretary did his utmost to try to arrange a coalition deal with Gordon Brown’s Labour party after the 2010 election: “I think he was keen,” Cable says. In the end, the parliamentary arithmetic did not stack up and Cable decisively intervened to endorse a deal with Cameron.

“He’s very good,” he says of the prime minister. “He’s obviously very bright and answers complex arguments and is a good communicator.” But Cable’s doleful disposition only reinforces the sense that he is uncomfortable in coalition with the Tories.

. . .

Cable believes that today’s Tory party remains the uneasy mix of uncompromising traditionalists and “one nation” moderates that his father Len supported. Tellingly, Cable is not sure whether the prime minister is on the side of the hard-liners or the moderates: “I think he speaks for the latter but I don’t whether he is – deep down.” As for George Osborne, the chancellor, Cable says: “We are not close buddies and don’t aspire to be. We do what has to be done.”

Behind the scenes, Cable is emerging as the key player in any future realignment of the Lib Dems with Labour. He plays down his contacts with Ed Miliband, but says the Labour leader is a good social democrat: “He’s an able guy and I can’t say any more than that really.”

Vince Cable with Nick Clegg©PA

On the campaign trail with Liberal Democrat leader Nick Clegg, April 2010

Tory colleagues claim he is not “a team player” for the coalition, while Nick Clegg’s allies sometimes grumble that Cable seems more interested in his own brand than that of his party. The business secretary often ignores the strictures printed on a special card – handed to all Lib Dem ministers – that they should name-check their party in broadcast interviews. Cable sometimes refers to himself as a social democrat instead. “Perhaps his eyesight is playing up,” remarked one aide to Clegg last year.

Relations between Clegg and Cable are businesslike but hardly warm. The Lib Dem leader’s team admits that a distance developed between them in the early months of the coalition, not least because Clegg failed fully to engage his older colleague on big decisions. That has now changed: Cable’s popularity in the party has made him indispensable; during the Farnborough walkabout he breaks off to take a call from Clegg to discuss the latest row with the Tories over House of Lords reform.

Cable concedes that the early months in government were tough. The budget squeeze forced the party to accept big rises in tuition fees at universities, a policy that he says will be vindicated but which “has been a political disaster for the Lib Dems”. He says of the broken manifesto promise: “The pre-election pledge was wrong – there’s no doubt about it.”

Cable also had to go through “long sheets of paper” cutting spending promises made by Lord Mandelson, his predecessor, and says mistakes were made. He admits that he underestimated the fact that the Labour minister had put in place a valuable long-term industrial strategy, identifying key growth sectors.

Meanwhile his department mourned the loss of Lord Mandelson – the first minister since Michael Heseltine to have the charisma and clout to stand up to the Treasury – and found it hard to adjust to life under the more remote Cable.

One business leader says Cable seems more interested in glamorous car companies (he concedes to a weakness to test-driving fast cars) than helping smaller firms. Cable says his campaign to make the banks lend more to business is evidence of his commitment to small companies, although he says his biggest regret in government is that progress has been painfully slow.

Cable also shrugs off the Tory epithet that he is “the anti-business secretary”: “I am not ashamed of having led the way for the responsible capitalism debate.” He says most of the criticism comes from the banks. “I think what they do is shelter behind describing themselves as business. In fact, he says “there is an anti-business culture in the banks”.

As his 70th birthday approaches, the business secretary’s appetite for politics appears reinvigorated. The prospect of a post-2015 Lib-Lab coalition beckons as a distinct possibility; in that scenario he would be a central player.

Vince Cable and wife Rachel©Rex

With his second wife, Rachel

Cable once said that he was “very conscious of mortality”, aware that time was slipping away. In 2001, after watching his adored first wife, Olympia, lose her long battle with cancer, he vowed never to waste a second: retirement now is not an option.

Michael Gove says politics would be the poorer without him. “There aren’t many people who have his knack of being able to appeal to the greenest grass roots of the Liberal Democrats and at the same time cause the masters of the universe in the City to acknowledge that they have been outwitted by a better brain.”

As we return to London from Farnborough, the business secretary ponders for a moment when asked what he thinks Cameron means when he says “Vince is Vince?” Cable smiles weakly and replies: “I think he recognises that we have a rather different outlook on life. We co-exist.”

George Parker is the FT’s political editor

Editor’s note: The black and white photos above appeared in the book “Free Radical : A Memoir by Vince Cable”

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