Vince Cable, the peoples choice for chancellor, explains his plans for reform

By Louise Armitstead Published: 8:36PM GMT twenty February 2010

The MP for Twickenham would concentration remodel on promissory note and taxation

His bureau is a dimly lit, close small room, tucked at the back of a lift missile in Portcullis House, opposite the highway from the Houses of Parliament. Black and white photos of "Vince out and about" are stranded rounded off on one wall and an old map of his subdivision of Twickenham is pinned on another. The usually equipment of intensity discernment are a little cuttings on his table about the abdication of Hector Sants from the Financial Services Authority, and a jot down noted "Answers".

Cable ambles in, wearing a thick cloak and a Trilby, his tall await ostensible over-sized in the small space. "Sorry, I was transparent about UK stagnation figures," he explains, branch to rummage for writings in his bag.

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The droll thing about Vince, as someway you feel similar to job him, is that you think you"ve well known him forever. Perhaps it"s since there are no surprises: he doesn"t appear older, younger, shorter or louder than on TV. But additionally his still Yorkshire drawl, singular in between the tip politicians, seems infrequently familiar.

It"s a peculiarity that"s severely worrying both the Tory and Labour camps. With weeks to go prior to the General Election, Cable"s recognition appears to be the usually non-moving part. In check after poll, he"s been voted as the majority appropriate welfare for Chancellor of the Exchequer, the majority devoted statesman on the economy and the majority arguable executive of regulatory reform.

For the dual main parties calming themselves that as a Lib Dem, Cable will never win, it"s still deeply irritating for him to be autocratic the key selecting battleground. And, with the concerns about the probability of a hung Parliament, Cable"s significance is growing.

One comparison Tory said: "If it"s that close, the Lib Dems will hold the whip hand, possibly by combining a bloc or in charity devotion to the Government. Vince competence be emissary personality [of the Lib Dems], but he"s the key man. And it"s his mercantile policies that are majority expected to be used as conditions for the support. We"re examination him really carefully."

So does he wish to be Chancellor? And that celebration would he cite to work with? From his background, it would be Labour. After flourishing up in Yorkshire and after study at Oxford and Glasgow, his initial dual and catastrophic attempts at winning a parliamentary seat, were done wearing a red rosette. But a little of his policies, quite in the area of tax, are unashamedly Tory.

Cable won"t be drawn. "We have no welfare one proceed or the other. We"ve regularly pronounced we"ll let the open confirm and do whatever is majority appropriate in the inhabitant interest," he says. "And whatever is financially responsible."

He denies reports that the Lib Dems have already proposed negotiations with the alternative parties but confirms a shopping-list of policies does exist. The election, he says, will be fought on "four big themes": economy and the deficit; bank remodel and bonuses; taxation reform; and the restructuring of the British economy.

Polls have regularly found that Cable"s credentials as an economist gives him the corner in conditions of credibility, quite in the City. Apart from his PhD in economics, Cable outlayed his career prior to apropos an MP as an mercantile adviser, rising to the on all sides of arch economist at Shell.

"It really helps carrying an intrinsic learn on economics," he says.

In a week in that a gorgeous form of venerable economists have banked up on possibly side of the evidence over when to cut Britain"s deficit, that side is he on?

"There are probably all sorts of jokes you could have at the responsibility of my former profession" he laughs. Then some-more seriously: "I"m fearful you can"t rely on veteran economists for the answers economics is a great fortify but it"s not great at elementary answers to formidable questions."

Although Cable has called for a slower proceed to slicing the necessity than the Tories, he has summarized £15bn of specific spending cuts some-more than Labour or the Tories.

"We"ve got to have a transparent plan" he says. "But the speed contingency rely on the state of the economy in the center piece of this year. If there is clever recovery, afterwards we should speed up the cuts, if not afterwards we should wait."

On the alternative key battleground, the banks, Cable final evident action. He says: "If I were Chancellor of the Exchequer the priorities would be tax, bill and classification out the banks. Day one, hour one I would shift the design of the nationalised banks.

"The Government has set the wrong objectives for the banks. The part-nationalised banks are perplexing to set up up collateral pot and progress their share price. The design of formulating shareholder worth with a perspective to an early sale is foolish. It might take a decade to spin the banks around.

"Now that they are nationalised, they should combine on assisting the economy. The state-owned banks have no excuses. They don"t need to be concerned about their haven ratios: they can"t go bust, they are owned by the Government. There is no reason whatever they shouldn"t be taking advantage of expanded lending policies."

The promissory note predicament is Cable"s clever suit, an area about that from the begin of the monetary predicament and famously prior to he has valid conspicuous prescient.

In Nov 2003 during Treasury questions in the House of Commons, Cable asked Gordon Brown, afterwards Chancellor: "Is not the heartless law that the expansion of the British economy is postulated by consumer spending pinned opposite jot down levels of personal debt, that is secured, if at all, opposite residence prices that the Bank of England describes as well on top of balance level?"

Brown"s answer has condemned him ever since: "We have been right about the prospects for expansion in the economy and the Hon Gentleman has been wrong."

Four years later, when Northern Rock collapsed, Cable emerged as transparent and decisive. He was the initial to remonstrate for nationalisation whilst his domestic opponents and the rest of the tripartite organisation fumbled for an answer.

His views on the banks are still some-more in advance and transparent cut than his opposition.

"How to understanding with the banks is at the heart of the complaint since of the faith of the rest of commercial operation on them. The banks contend they are lending to businesses. But small commercial operation owners and commercial operation organisations are revelation us a opposite story: that lending isn"t there. I"m not suggesting for a second that Alistair Darling should be on the house of the banks, selecting that Fred Blogs should get that volume of money, no. But there contingency be a vital framework."

Does that meant requisite lending targets?

"Yes, over all targets to grasp growth. We mustn"t be silly. But the banks need to reply and recognize that their poise is deleterious the economy."

If the Government has dealt with the banks badly, Cable says the Tory plans for restructuring the monetary complement are bad too.

"We remonstrate with the Tory approach. The FSA messed up big time. But there"s been a change, they"re recruiting improved people. We"d leave the have up of the tripartite. The worse thing after a two-year interregnum is for new legislation to come in and shift everything. Regulation and organisation needs to be got right and it"s deeply unhelpful to speak up all this uncertainty."

But Cable says bankers contingency fool around their part, generally on bonuses. "The open won"t mount for the actuality that the taxes they are shelling out is simply being paid out to comparison executives. The inconsistency in between the compensate of an investment landowner and that of someone using a association of 100 people is ludicrously distorted."

Cable"s annoy over bonuses is that they are not scrupulously earned, he says.

For Cable, the issue of lending, bonuses and risk direct one solution: the break-up of the banks that are "too big to fail".

He insists he"s not simply opposite the banks but he thinks the UK is far as well reliant on the sector. "We"re removing to Icelandic levels of faith on promissory note and that"s not sensible," he says.

Reform of the taxation complement is key. On the troublesome theme of non-domiciled taxation standing he says that it is "not convincing in a globally integrated universe to levy punitive levels of taxation on general workers differently they"ll only go elsewhere.

"The useful [approach] would be to concede people to work for 7 years we can remonstrate about how prolonged it is after that time you contingency compensate taxes similar to everybody else. It"s traffic with rich people sincerely and realistically."

The same arguments request to house tax. "Our beliefs are broadly the same as the Tories. We wish a reduce rate with fewer exemptions. But it"s formidable to grasp this but impacting alternative tools of business. The design is to have a rival rate of tax.

"In the UK we"ve been flapping towards the higher finish of the scale. If I were Chancellor my design would be to have commercial operation taxes rival again."

Central to Cable"s prophesy are geographic imbalances. "The open administration department has been over-centralised. The Liberal Democrats would decentralise British internal supervision and await infrastructure growth in the regions."

Before I go, I ask for only one some-more prediction: where"s the bubble? Cable doesn"t blink: "There"s something really bizarre going on with skill prices. The big improvement in overvalued prices hasn"t happened. There"s been a prejudiced improvement about 6 months after the crash. But not a correct one. This is worrying." Let"s never forget, Mr Cable has been right before.