Global: James Graham | guardian.co.uk

The tricky problem with Vince Cable | James Graham

James Graham — Tue, 22 Sep 2009 15:00:00 GMT

The Lib Dem shadow chancellor remains popular, but his bewildering shifts on economic policy could damage the party

How do you solve a problem like St Vincent? His approval ratings both inside and outside of the party are huge. Yet very little of Twinkle-toes Cable's stardust seems to be settling on the Liberal Democrats in terms of improving poll ratings. It is a conundrum that is superficially quite puzzling but there's nothing magic about it. In his six years as party treasury spokesperson, this former economics advisor to Kenya and chief economist of Shell has failed to come up with a coherent and consistent economic policy for the Liberal Democrats. To paraphrase J K Galbraith, the answer is so simple the mind is repelled.

I've counted at least 11 very significant shifts in the Lib Dem front bench's position on the economy in two years, most of which aren't actual party policy. Some of the blame clearly lies in Nick Clegg's tendency to manufacture hostages to fortune on an industrial scale. But there are no indications whatsoever that Clegg has ever acted without his treasury spokesperson's blessing. And then there is the question of how the never-published £20bn list of government "waste" being hyped up last year has transmogrified into a £14bn list of "savage" cuts which involve scrapping cherished liberal commitments such as universal child benefit.

Why was Cable pushing for us to commit to tax cuts last year which it now appears he had no way of funding? And why is it that the economic situation is so serious that there is no alternative to do anything other than think the unthinkable when it comes to spending cuts, but when it comes to tax rises we are so timid? Even the Orange Book keepers-of-the-flame Centre:Forum have been urging the party this summer to consider a combination of a property tax and a change to the capital gains rules which would raise £6-10bn a year . Cable's proposal would raise a measly £1.1bn, so why bother?

I have huge admiration for Vince. Six years ago, when I was experiencing a credit crunch of my own, the fact that there was a single politician out there who understood how badly banks were behaving in encouraging people to get into unmanageable levels of debt meant a tremendous amount to me. But he is not infallible. He's not, whisper it, even indispensable.

Despite this, he eschews the collegiate discipline of party policy development in favour of going out on a limb and trusting his own judgment to carry him through. There seems to be almost no strategic thinking behind how he presents his shifts in position whatsoever. He hasn't been articulating a party position; he's been engaging in punditry. The latter may make you incredibly popular with John Humphries and Jeremy Paxman, it may even acquire you rock-star status, but it isn't the job the party requires him to do.

We need to recognise this for what it is: hubris. But is Vince himself capable of seeing this? I was struck by one MP this week saying that Cable was having a "David Owen moment". In Liberal Democrat circles that is about as harsh a judgment as is possible to make about a colleague. Despite the adoration of the party faithful, Cable has certainly been looking harassed, suggesting that on a personal level the week has been taking its toll. There is hope yet that he has quietly realised that he has made a grave error this week.

As a Georgist, I'm delighted that Vince is now publicly making the case for a land value tax. As a democrat, I'm appalled. He had plenty of chances to challenge the received wisdom within the party in favour of a local income tax in the past few years; eight months before the general election it is now simply too late. The party's democratic policy-making process may look eccentric to a cynical, dying media, but it has consistently stopped the party from degenerating into factionalism. The Napoleonic approach of Labour and the Conservatives by contrast has resulted in both parties to be riven by festering sores beneath the surface. It also, frankly, leads to better policy by ensuring that major new policies are detailed enough so that they can withstand basic media scrutiny.

Speaking at a fringe meeting this week, David Laws MP talked about how the Scottish Liberal Democrat's tortuous decision-making process caused a lot of tensions when negotiating a coalition with Labour in 1999 but ensured that the following eight years of government went ahead remarkably smoothly. By contrast, Clegg and Cable seem determined to drive a steamroller over the party's system of checks and balances. Demolishing the delicate culture of trust and accountability within the party in this way could make negotiating its way through a hung parliament situation almost impossible. The consequences to the party could be, well, quite savage.

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