Cable: Brown Has Failed To Address Business Concerns

2.14.00pm GMT Tue 9th Nov 2004

Following Gordon Brown's address to the CBI conference, Liberal Democrat Shadow Chancellor, Dr Vince Cable MP, said: "This government - and Gordon Brown in particular- has established a reputation for maintaining economic stability. The Independence of the Bank of England has helped deliver steady growth, low unemployment and inflation.

"But the Government's endless self-congratulation has bred hubris and complacency and is threatening economic instability.

"Rising interest rates may have 'cooled' the housing market but they have meant higher borrowing costs for manufacturers. In addition business is facing slower domestic and export demand due to high exchange rates and record oil prices.

"While I share the government's hope that a 'soft landing' will be achieved in respect of asset inflation in the housing market and associated household debt - there is worrying evidence from record personal bankruptcies and growing repossessions that the landing could be very hard.

On the need to promote enterprise, Dr Cable said:

"From a business perspective there has also been increasing concern, and sometimes anger, expressed by many firms who are facing greater costs, complexity and inconsistency due to increasing Government and EU regulation.

"Much of this is wrongly blamed on the EU when it is 'gold plating' by the DTI which is the principal villain of the piece as witnessed by the Working Time Directive.

"Our proposal to abolish the DTI is not just about saving money but because we understand the frustration business has with a meddling, centralising, over regulating government. Its abolition is the largest act of deregulation.

"The government's task is not to pick winners and prop up losers but to promote enterprise. There are some CBI members who benefit from the DTI but I strongly believe that a modern economy should not rely on corporatist methods.

"Mrs Hewitt's proposals are far too timid. With us, no new regulation will be passed until there is a fully published assessment of its costs and necessity by an independent body. Every new regulation will automatically cease unless Parliament specifically approves its renewal after a period specified in a sunset clause."

On the longer term needs of business Dr Cable said:

"Gordon Brown's greatest failure is that his tinkering has created massive disincentives to retirement. Currently four in ten pensioners pay over 50% in tax and even the Government's Pensions Minister has admitted that this is due to the complex means testing that exists.

"There must be a cross party consensus in pensions in which there is a higher state pension but also a 'flexible age of retirement'.

"The CBI has been critical of attempts to remove mandatory ages of retirement. It is essential that we move away from a system in which people on their sixty fifth birthday go from being a valid member of the workforce to being seen as a burden on the economy. This age discrimination must be removed."