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Vince Cable live webchat Tuesday 20 December 1.30-2.30pm

(127 Posts)
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GeraldineGransnet (GNHQ) Thu 08-Dec-11 15:47:44

We're delighted that Vince Cable, Secretary of State for Business, Innovation and Skills, will be coming into GNHQ to join us live for a webchat on Tuesday 20 December. A LibDem MP (for Twickenham) and an economist, Vince has been a leading commentator on the banks and their role in the economic crisis. He holds one of the key posts in the coalition. Ask your questions here.

VinceCable Tue 20-Dec-11 13:55:36

Supernan

The Deputy Prime Minister, Nick Clegg, said that better-off elderly people should make a “sacrifice” to help the Government balance its books. This now appears not to be a voluntary sacrifice. He proposes to means test the elderly for their bus passes & heating allowance. What is Vince Cable's view on this subject. Is this a party policy? I live in his Twickenham constituency.

The country is significantly poorer than three years ago because of the financial crisis and its legacy. This impacts on the living standards of almost everyone. We have sought to protect the elderly by re-linking the basic state pension to the higher of earnings or inflation. There is no government proposal to means-test bus passes or heating allowance.

VinceCable Tue 20-Dec-11 13:56:20

froufrou

David Willetts and others have suggested that the baby boomers - our generation - are at fault for hoarding wealth and denying our children the means to get decent jobs and on the housing ladder.

What do you make of this argument? Can you assure us that the government won't try to dodge responsibility by setting one generation against another?

I don't think David sought to blame people of your and my generation, but there is a massive generation gap. My grandchildren don't expect cheap housing, secure jobs, pensions and free universities, in the way that I was able to enjoy.

rosiemus Tue 20-Dec-11 13:57:14

What would you say to an 18 year old who is totally dispirited about the future? Huge debts if they do study, harder to get a job if they don't, lack of jobs altogether and no hope of ever being able to buy their own home? It was so different in my day

VinceCable Tue 20-Dec-11 13:57:40

auldcodgers

Closing businesses = LESS tax revenue for the government.

Less fuel being bought = LESS tax revenue for the government.

Less retail goods being bought = LESS tax revenue for the government.

More unemployment = MORE unemployment benefit being paid out by the government.

I am not an economist but I can add up and these 3 LESSES and 1 MORE =

BIG TROUBLE for the economy.

Restricting people's incomes by upping taxes is not answer. If you want people to spend and create growth for this country you must reduce taxation and thus give incentive for spending.

LESS taxation = More spending = More growth = Stronger economy.

Your antithesis modelling is superficially attractive. If the economy worked like that is would be great. Unfortunately, unfunded tax cuts don’t translate into ‘stronger economy’ as you describe unless we are very lucky. The more likely outcome is:

Tax cuts = bigger budget deficit = higher borrowing costs = less growth = weaker economy. I think I can add up too!

rosiemus Tue 20-Dec-11 13:58:34

"My grandchildren don't expect cheap housing, secure jobs, pensions and free universities, in the way that I was able to enjoy."

your answer coincided with my question of a similar vein. So how DO you motivate your grandchildren (or at least ours) when all they can see ahead is debt and doom and gloom?

spid Tue 20-Dec-11 14:00:15

On a scale of one to ten, how optimistic do you feel about the country's economic future?

If you are at all positive, which industries are going to supply the growth?

VinceCable Tue 20-Dec-11 14:01:42

greatgablegran

Why does is Sir Fred Godwin still Sir Fred? If you are really serious about reforming the closed shop that runs Britain shouldn't you start by expelling some of its worst members?

Nick Clegg said yesterday that inequalities in wealth are greater than inequalities in income. Shouldn't people who sell their houses to fund elder care be excluded from paying a Mansion Tax?

I worry about how my grown up children are going to afford to have a family and lay foundations for the future. Am I right to be worried? How will Britain earn its living in future?

How many Tory MPs are you really sending Christmas cards to?

I have just received the report on what's happened inside Sir Fred Goodwin's RBS. It is an absolute scandal, but there are limited legal powers to act, but you're right, we do need to clean up this appalling mess and stop it happening again. That's why we're splitting up the big banks through ringfencing to stop the casinos affecting ordinary sensible banking.

In future, we will have to be more outward-looking and looking in particular to the big emerging markets of Asia and South America - exports and attracting inward investment. We've had a long period of artificial prosperity based on excessive borrowing and the country will in future have to earn its living through exports, business investment and being good entrepreneurs.

I'm sending no Christmas cards to Tory MPs, but I look forward to getting back to business working with them in the New Year.

VinceCable Tue 20-Dec-11 14:01:55

cabpjackson

I worked and paid tax in the UK for 50 years, but when I emigrated to Vancouver Canada my pension which includes some serps (State Earnings related Pension Scheme) was frozen at 48 pounds a week because of the UK governments inconsistant arrangements with countries outside the EU. I should be getting 139 pounds a week now so I am missing out 91 pounds a week, and I am asking what your government is going to do to restore the pension I have earned, along with the pensions of more than half a million British Pensioners in more than 120 countries, and of people in UK who might be considering retiring abroad?

I am afraid that we do not plan to change the way that pensions are paid to people who moved abroad.

VinceCable Tue 20-Dec-11 14:02:44

mousie

I presume as a member of the cabinet that you don't really suffer from ageism, but do you sometimes look around your colleagues in parliament and think that some highly competent people are passed over because of an obsession with youth?

I think I have to declare an interest - I think Ken Clarke and I are now the senior members, but yes, of course, we need a good spread of age as well as gender, class and other things.

VinceCable Tue 20-Dec-11 14:03:21

JessM

Oh do they? In which case what, Mr C, are you going to do about the dismal state of the sciences? My husband suggested that science degrees should be subject to much lower fees. How about that for an incentive for bright students to follow that path?

I do care about sciences. Unusually amongst ministers I have a science degree (but later switched to economics) and one of my two sons is a research scientist.
Actually there has recently been a big increase in students applying to do STEM especially maths and physics. There is no need to drop standards and we shouldn’t. The science research budget has been protected.

VinceCable Tue 20-Dec-11 14:04:21

Berengaria

Could you please ask Mr Cable what is being done to help older people back into the workplace after they have been made redundant.

I have been out of work for three years, despite looking for a new position almost daily, with little success. I have always been hard working and find this period of my life unnecessarily stressful.

I thought the government wanted ordinary persons to spend more on the High Street thus helping small businesses, This is not possible for me, millions more and I do not have a time line for this to change for the better.

I am very sorry to hear about your personal experience of worklessness and stress. There is a lot of attention being paid to young people out of work but I recognise that older people suffer periods of unemployment too.
We are scrapping the ‘default age of retirement’ so that older workers who make a valuable contribution can’t just be forced out of work on age grounds. Some employers (e.g. B & Q) are proactively good at hiring older workers.
We are funding a lot of training and retraining places through the National Apprenticeships service and FE colleges.
Some help is also being given to those on benefits who start their own business – have you looked into that?

VinceCable Tue 20-Dec-11 14:05:39

eggmayo

Vince. I am a big fan of yours, always have been, always will be. But when you say "As someone who was, and still is, left of centre and an opponent of Tories for 40 years I sometimes feel uncomfortable with the coalition too. But working with other parties in the national interest is only ‘betrayal’ in a very tribal view." I would honestly like to know where the point is when you break.

Student debt, the NHS, Europe - all of the principled positions you have held so dearly for 40 years slain in just 18 months of this coalition. When do you say "enough is enough"?

I realise it's difficult to get one's head round the idea of working together with people who have a different outlook, but don't most people do this very day of the week at work or in their neighbourhood?

You're very negative, because we have quite a lot of positive stories to tell. Lifting low earners out of tax, protecting state pensions, the pupil premium and radical reform of the banks.

MmeLindt Tue 20-Dec-11 14:06:52

Hello Vince,

Over on Mumsnet, a group of frustrated women started talking about the cuts and how they were unfairly aimed at the most vulnerable in our society. The more we ranted, the more we realised that we wanted to do something to highlight these injustices. Within a couple of days, we had set up a blog and started writing about the cuts that we find most objectional. www.toomanycuts.blogspot.com

My question is this:

Nick Clegg said yesteray:

History teaches that, at times of deep economic uncertainty, societies become more exposed to the forces of division – populism, insularity, separatism, an 'us versus them' mentality

Why then are the Lib Dems not doing more to go against the Conservative rhetoric of "benefit scroungers", which according to the LSE and the Guardian has increased in recent times.

The DWP has stated that benefit fraud is estimated at around 0,3% but most respondents of the survey conducted by the LSE think that the rate is 50 - 70%.

Us vs Them at present seems to be those who are not so badly off, against those who are facing benefit cuts and homelessness.

Does Nick Clegg mean what he says, or it is populism? And what will the Lib Dems do to show that he means business, because times are too serious for empty promises.

VinceCable Tue 20-Dec-11 14:08:41

NativityQueen

Not really a question, just a further point on the university funding. There were 2 things you could have done that would have been much much fairer.

Either, make it a graduate contribution, similar to now, but instead of being an 'amount owing' make it a % of income over a fixed level, for a fixed number of years. That would really be progressive, and would avoid this situation of middle income people having to pay back more than the wealthy.

Or, make the loans interest free. So, a graduate can contribute more, but it doesn't grow and grow in the way it is going to - for some income groups they will be paying back far more than the 27k of fees borrowed, because of the interest. This would mean the wealthy paid back quicker, the poorer didn't pay so much, but you would avoid the trap of being a middle income worker who has to pay back 50k worth or so, because of the interest.

Neither of those things are rocket science, but would make the thing so much fairer than the proposed system. I also take massive issue with the fact that although it was peddled as 'contributions based on future income', students will receive bursaries because of their parents' income, irrespective of what they may end up earning, and so if you happen to come from a slightly better off family, you will be subsidising someone who may be earning far more than you are.

Your suggestions are thoughtful and helpful. Actually, the amount people pay as a graduate contribution rises with income, which makes it more progressive than the formula you suggest. Also, if there was no interest rates there would be a massive subsidy, which to be frank we can't afford. The system we have now is a kind of graduate tax and the wealthiest should pay the most.

GeraldineGransnet (GNHQ) Tue 20-Dec-11 14:08:51

In the United States there have been very interesting schemes to help people in midlife to get back into work after they have been made redundant, or are no longer wanted by large companies - eg internships for older people, schemes for making the transition from private sector to third sector, and (generous) prizes and reward schemes for 50+ social entrepreneurs. Would you consider bringing in schemes of this kind here to focus on making use of the talents of people in the second half of life?

VinceCable Tue 20-Dec-11 14:10:43

spid

On a scale of one to ten, how optimistic do you feel about the country's economic future?

If you are at all positive, which industries are going to supply the growth?

The next few months will be very difficult. But in the longer term, I'm optimistic - around 7 or 8 out of 10. We have some superb companies in advanced manufacturing (cars are doing very well), creative industries, IT, professional and business services. We're also open to the best companies in the world who like being based in Britain.

fabuless Tue 20-Dec-11 14:11:48

Isn't all the talk about a different type of capitalism just a way to get us to accept being poorer?

VinceCable Tue 20-Dec-11 14:13:24

rosiemus

What would you say to an 18 year old who is totally dispirited about the future? Huge debts if they do study, harder to get a job if they don't, lack of jobs altogether and no hope of ever being able to buy their own home? It was so different in my day

There is no reason for 18 year olds to be dispirited. If they want to study they do not acquire huge debts under the new system. The repayment is linked to their future income as graduates and if there is a low income or none, they don't pay.

You're right that life was easier when we were young, but those days of job security, cheap housing and guaranteed private pensions are now over and nonetheless hardworking enterprising young people will succeed.

VinceCable Tue 20-Dec-11 14:14:17

Annobel

Vince, please could you, as an economist, explain the enormous influence that the ratings agencies have on the world's economic situation? Why should these private companies (is that what they are?) dictate interest rates to democratically elected governments?

The rating agencies certainly need to be effectively regulated not least because of conflicts of interest (they receive income from the companies they rate). There are moves in the EU to tighten regulation but we do not have direct control of the rating agencies (the main ones are US based).

VinceCable Tue 20-Dec-11 14:15:00

Dropstitch

Hi Vince, I voted Lib Dem at the last election and, whilst horrified that the Conservatives got in, was even more horrified that the Lib Dems chose to form a government with them and not the Labour party. I do believe that Labour needed some time to sort themselves out again but always felt that they were a more natural partner to the Lib Dems than the Conservatives.

What do you think a LibDem/Labour coalition could have achieved that a Conservative/LibDem coalition won't, ie on tuition fees?

It was not possible to negotiate a coalition with Labour. The numbers were not there. We did look at the possibility. This present coalition was the only way to get a stable government. Labour introduced tuition fees and suggested an increase so this was not an alternative.

VinceCable Tue 20-Dec-11 14:15:07

GeraldineGransnet

In the United States there have been very interesting schemes to help people in midlife to get back into work after they have been made redundant, or are no longer wanted by large companies - eg internships for older people, schemes for making the transition from private sector to third sector, and (generous) prizes and reward schemes for 50+ social entrepreneurs. Would you consider bringing in schemes of this kind here to focus on making use of the talents of people in the second half of life?

That's a good idea. We must look at it carefully. I should say that since I've been in the government, we've massively increased apprenticeships, which mostly go to adults and include a lot of retraining. We've also kept up funding for adult education which keeps a lot of older workers mentally active.

VinceCable Tue 20-Dec-11 14:15:55

effblinder

Hi Vince,

Thanks very much for joining us. I wonder how you feel about the public attitude towards Nick Clegg and how far you feel it is justified. He has received a lot of flak (putting it mildly!) for his actions on issues like tuition fees, and the points he has disagreed with the Tory line on have slipped under the radar a lot more.

Do you think there is enough public and party support for Clegg to stand as Lib Dem leader at the next election, or do you think that he has irrevocably damaged his Lib Dem credentials now?

Nick has had a savage press (and the rest of us to a lesser extent). He is attacked from the right for not being sufficiently close to Tory policy and from the left for being too close. Perhaps he – and we - are therefore in the right place.

crumblygranny Tue 20-Dec-11 14:16:30

Thanks for asking my question, but re EggMayo's question. Surely there' s a policy you have in mind that you couldn't sign up to? What are your personal 'red lines'?

VinceCable Tue 20-Dec-11 14:16:51

MrsMicawber

I've popped over from Mumsnet.

Vince, do you think the NMW is a reasonable living wage, and if it was raised, don't you think benefits would still be a viable lifestyle choice?

This raise could be funded by ensuring that executive salaries were kept reasonable, with wealth spread around more evenly throughout organisations.

I would start with Council Executives and Social Workers having their pay evened out somewhat.

I support the minimum wage and recently approved an increase. I act on the advice of an independent body, the Low Pay Commission, and I think it is better to keep decisions non-political, I certainly agree with you on executive pay and I've just finished an exercise looking for ideas on how we ensure that companies keep their top pay under control.

eggmayo Tue 20-Dec-11 14:16:58

Thanks for answering my question Vince, but it's not really the "working together" part that I have an issue understanding.

Working together is fine and of course I understand the strains of coalition. But every day in the people I choose to work with I look for compromise - they'll give a little on this, I'll give a little on that. But then they ask me to sacrifice beliefs I have held dearly for years, and I have to say "no, sorry, I can't do that, no deal."

My concern is this - you are the acceptable face of the coalition - you're given a licence to come on here and joke around and say the coalition is a "nightmare" - but do you ever worry that in doing so you're just legitimising time and time again the Tories getting away with murder. When is enough enough for you? When do you refuse to go on making the jokes?

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