Vincent Cable: This recession is very far from over (Twickenham & Richmond Liberal Democrats)

Vincent Cable: This recession is very far from over

June 18, 2009 12:07 PM

cable book storm • [Jun 17]: Vincent Cable writes: 'THE mother of all economic crises seems mysteriously to have vanished in the face of a determined counter-offensive by the forces of optimism . . Perhaps those government ministers who spotted the "green shoots of recovery" in the frozen winter earth were not so deluded after all?

. . Making explicit choices is surely preferable to an approach that cuts services indiscriminately. That is why it is necessary to take on some sacred cows: public-sector pensions (ending defined benefit schemes for new entrants and raising contribution rates); tax credits (embracing 2m recipients with well over average incomes); defence (involving vast long-term commitments to maintaining a worldwide role); and higher education for half the population.

But a bigger question concerns the vast sums the Government pumped into the banking system (and even bigger guarantees). There is a danger now of a dash for cash: a quick sell off of public shares at give-away prices, leaving the taxpayer with a vast toxic pile of bank 'assets' and the . . City unreformed. In the Square Mile and the Treasury the dangerous idea is beginning to gather momentum that the crisis is over and that "normality" can soon be restored. Bonuses are back in fashion. Dangerous stuff. If a fresh heart attack is to be avoided in the financial sector, damaging the wider economy, a long period of regulated convalescence is required. The crisis is not over.'

Richmond upon Thames Liberal Democrats: