Cable Preempts Osborne Loan Cap in U.K. Party Jostling

With less than a year to go to the general election, the two parties in the U.K. coalition government have begun jostling each other for credit on big policy announcements.

Yesterday morning, Liberal Democrat Business Secretary Vince Cable appeared at short notice on the BBC’s flagship radio news show to say the Bank of England should restrain the size of mortgages as a proportion of income. Just over eight hours later, Conservative Chancellor of the Exchequer George Osborne pledged to give the central bank that power.

In March, Cable was on the receiving end of such a maneuver, when Prime Minister David Cameron made an announcement on increasing the minimum wage that the business secretary had been due to give a few days later.

“Up to now the parties have differentiated themselves from each other by talking about how the others are preventing them doing what they want to do,” Andrew Russell, professor of politics at Manchester University, said in an interview. “Now it’s a bit more aggressive and they’re trying to encroach on each other’s territory. For the Lib Dems, it’s important to get some credit on the economy.”

Cable’s intervention focused on housing, the area where he made his name as his party’s economics spokesman over the past decade. He has warned of a danger of another housing bubble for the past year, expressing skepticism about Osborne’s Help-to-Buy program, aimed at helping homebuyers.

Slumping Support

The Liberal Democrats saw their popularity slump after they entered the coalition in 2010. They are currently polling fourth nationally, behind the opposition Labour Party, the Tories and the U.K. Independence Party. In last month’s European elections, the party finished fifth, behind the Greens.

Since those elections, the splits within the coalition have largely been within parties, with Cable forced to disown a friend who was plotting to remove Liberal Democrat leader Nick Clegg, and Cameron intervening to settle a public dispute between fellow Tories Theresa May, the home secretary, and Michael Gove, the education secretary.

Cable said in an interview published last night in The House magazine, which is distributed to lawmakers, that he worked well with Tory colleagues and that Cameron had been “supportive” of his industrial policy.

Next week, the Tories will seek to emphasize differences with the Liberal Democrats in another area. Conservative ministers, who back a plan to introduce mandatory jail sentences for anyone caught carrying a knife for a second time, will abstain in a vote in Parliament on the issue because it’s not an agreed government policy. Backbench Tory lawmakers will be allowed to vote for the proposal, while Liberal Democrat ministers and lawmakers will oppose it.

To contact the reporter on this story: Robert Hutton in London at rhutton1@bloomberg.net

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net Eddie Buckle

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