Vince Cable’s borrowing bombshell

It is only towards the tail end of his lengthy New Statesman essay on ‘the long economic stagnation of post-crisis Britain’ that Vince Cable lets off one of his bombshells. He’s clearly freelancing, and not at a bad time, either, given it’s his party’s Spring Conference this weekend. Although it’s possibly not enormously helpful for the Prime Minister, who is giving a major speech on the economy tomorrow. The Business Secretary examines misinterpretations of Keynesianism and the effect of the government’s deficit reduction programme on the economy before dropping this:

‘Nevertheless, one obvious question is why capital investment cannot now be greatly expanded. Pessimists say that the central government is incapable of mobilising capital investment quickly. But that is absurd: only five years ago the government was managing to build infrastructure, schools and hospitals at a level £20bn higher than last year. Businesses are forward-thinking and react to a future pipe – line of activity, regardless of how ‘shovelready’ it may be: we have seen that in energy investment, where the major firms need certainty over decades.