Business Secretary Vince Cable launches an attack on the worst excesses of capitalism in what Gary Gibbon says is a coded warning to Liberal Democrat leader Nick Clegg.
Before his speech in Liverpool, Mr Cable had insisted he was pro-business after extracts were released of what he planned to say.
The former head of the CBI, Lord Digby Jones, even accused him of behaving like a “Liberal rabble rouser” and said he should withdraw his remarks.
But in the conference hall Mr Cable stuck to his script, attacking “the murky world of corporate behaviour” and the “spivs and gamblers” of the City. He began by talking about the effect he had had and the difficulties of working in a coalition government with the Conservatives.
“I have managed to infuriate the bank bosses; acquire a fatwa from the revolutionary guards of the trades union movement; frighten the Daily Telegraph with a progressive graduate payment; and upset very rich people who are trying to dodge British taxes. I must be doing something right.
“But I am told that I look miserable. I’m sorry, conference, this is my happy face. ‘Aren’t you having fun?’ people ask. It isn’t much fun, but it’s necessary; necessary for our country that our parties work together at a time of financial crisis.”
‘In bed with the Tories’
Mr Cable said “being in bed with the Tories” was exhausting and it was important the Lib Dems maintained their identity.
But like party leader Nick Clegg on Monday, he reserved his strongest criticism for Labour, whom he accused of being “deficit deniers” who “oppose every cut, ranting with synthetic rage, and refuse point blank to set out their alternatives”.
Turning to the banks, the business secretary said they had caused more damage than militant trade unionism ever could.
“On banks, I make no apology for attacking spivs and gamblers who did more harm to the British economy than Bob Crow could achieve in his wildest Trotskyite fantasies, while paying themselves outrageous bonuses underwritten by the taxpayer. There is much public anger about banks and it is well deserved. But I am not seeking retribution.”
He said “tough interventions” would be needed to ensure that the banks used their money to support business, rather than see it “frittered away in bonuses and dividends”.
Vince bring back Brown memories
If Vince Cable was leading the party in coalition, this speech signalled, he would handle it very differently, writes political editor Gary Gibbon.
By implication, not missed by Nick Clegg's friends, the current leader's got some of the strategy and tone wrong.
This wasn't a leadership bid but you were reminded of those distinctly, painstakingly diferentiated speeches that Gordon Brown used to give at Labour Conferences the day before Tony Blair's leader's speech.
Read more
Royal Mail
Mr Cable announced that the sale of Royal Mail would mean the organisation’s staff benefiting from “the largest employee shares scheme of any privatisation for 25 years”.
But he said that while Britain needed successful business, markets were “often irrational or rigged”, adding: “So I am shining a harsh light into the murky world of corporate behaviour. Why should good companies be destroyed by short-term investors looking for a speculative killing, while their accomplices in the City make fat fees?
“Why do directors sometimes forget their wider duties when a cheque is waved before them? Capitalism takes no prisoners and kills competition where it can, as Adam Smith explained over 200 years ago.”
Universities
On university funding, Mr Cable said he wanted graduate contributions linked to earnings, asking: “Why should low-paid graduates – nurses, youth workers or science researchers – pay the same as corporate lawyers and investment bankers?”
I am shining a harsh light into the murky world of corporate behaviour. Why should good companies be destroyed by short-term investors looking for a speculative killing, while their accomplices in the City make fat fees? Business Secretary Vince Cable MP
Fairness
He said the “biggest test” of the Lib Dems’ contribution to the coalition was ensuring that fairness was at the heart of government.
“You’ll remember our Conservative colleagues campaigned in the general election to lift the inheritance tax burden on double millionaires.
“But they have dropped that commitment. They have accepted in the coalition agreement that the priority for cutting income tax is for low earners, not top earners.”
Mr Cable said he would launch a consultation starting next month on issues including corporate takeovers, executive pay, and corporate short-termism. He has been a voice of caution over the behaviour of businesses and banks for some time – both inside and outside government.
CBI attack
Mr Cable’s comments might have given reassurance to disgruntled Liberal Democrat activists, who have demonstrated their concerns at this year’s conference over the coalition compromises Mr Clegg has had to make to work with the Conservatives in government.
Mr Cable has harsh things to say about the capitalist system. It will be interesting to hear his ideas for an alternative. CBI Director-general Richard Lambert
Before the speech, the CBI employers’ organisation had criticised Mr Cable’s remarks.
Director-general Richard Lambert said it was “odd that he thinks it sensible to use such emotional language,” adding: “The case for corporate takeovers is that they allow control of poorly run businesses to pass into more efficient hands. Mr Cable has harsh things to say about the capitalist system. It will be interesting to hear his ideas for an alternative.”
It is understood that Mr Cable wants shareholders to have more control over how takeovers are conducted, particularly in the wake of US giant Kraft’s controversial takeover of Cadbury.
Mr Clegg missed Mr Cable’s speech because he was at the UN summit in New York representing the UK.