Vince Cable accuses Labour of pushing myth of Lib Dem betrayal

Vince Cable was the surprise guest at the Fabian Society’s Progressive Fightback Conference on Saturday, discussing why the progressive majority he clearly desires had not materialised at the local elections and in the AV referendum.

His take on this topic was surprisingly blunt:

“To be frank it didn’t turn up, it didn’t exist.”

Such a claim is a stretch given Labour’s strong showing, but the failure of the AV referendum means the question is worth exploring.

Cable blamed it on what he described as the ‘myth of betrayal’ felt by Labour towards the Liberal Democrats and the return of a more tribal approach to politics, with the battleground being drawn on strict left v right lines, which he argued alienated swing voters.

Reminiscing about his time as a special adviser to John Smith, Cable reminded the audience of his Labour roots and warned that the bitter tribal divide we are witnessing on the left reminded him of the ‘civil war’ that fractured the Labour party after the winter of discontent.

He blamed the current divide on fractures between Labour and the Liberal Democrats which run deeper than a sense of betrayal and are due to a fundamentally different understanding of not only the consequences of the recession, but also the causes, and argued that the views held by both Labour and the Liberal Democrats and the divide between them were best outlined through caricatures of the respective arguments.

In Cable’s eyes Labour and its supporters view what comes next as essentially businesses as usual. For the  last 10 years Britain was broadly going in  the right direction, with Gordon Brown presiding over steady stable growth, but then in 2008 we were hit by a global financial crisis which originated in the US. We handled the immediate consequences pretty well and pulled ourselves out of a nasty recession.

Yes the deficit exists, but by continuing on the same path as before and encouraging growth we can pay it off , so why are the coalition messing it up and stopping growth?

The alternative caricature he painted argues that the cause of the economic crash was unnatural growth built on deeply unsound financial foundations. Most of the productivity growth was a result of a boom in the financial sector and this created abnormal growth which wasn’t replicated across other sectors.

This led to households became very dependent on financial sector and were highly leveraged as a result of easily accessible credit. This also created a  property boom which helped reinforce a sense of financial well being amongst the population. When the bust arose it was a global problem, but our over reliance on abnormally large banks created additional pressures which were not felt to the same extent elsewhere.

Even if we disagree with Cable’s thoughts on economic policy and the coalition’s cuts programme, his suggestion that the centre-left requires a reconciliation over the causes and lessons of the recession is worth considering as part of Labour’s reflection on its time in office. So too is a fundamental question he posed to the audience: asking if they really believed a return to strong tribal politics would benefit Labour.

His acknowledgement that in the short term a more tribal political culture would do the most damage to the Liberal Democrats is something that many Labour supporters will relish. However, as Andy Burnham warned at the start of his speech, defeating the Conservatives, not destroying the Liberal Democrats should be the party’s focus.

Cable’s  final contribution to the debate was to pose a further question, which party do we think are best positioned to mobilise 40 per cent of the vote, given the current financial state of the parties and attitudes within the media. This is a argument that deserves broader consideration, however much we would like to pretend otherwise.

Labour are not currently in a position where it can guarantee reaching 40 per cent of the vote in a general election, whatever current polling data suggests.