Vince Cable made a substantial speech to the Royal Economic Society at the beginning of this week. The speech is worth reading in full because it represents one of the most thorough, thoughtful and wide-ranging perspectives on the economy that you are likely to hear from a front bench politician. Vince very clearly differentiates his position from that of the Conservatives on a whole host of points. He also, in my view, provides a more balanced assessment of the nature of economic policy under Coalition than you are likely to get from any member of the Quad. Vince does not pretend that the Coalition has adhered resolutely to plan A in the face of temptations to change course. Rather he acknowledges that things have not played out in the way that was anticipated in May 2010. He acknowledges that the recovery, though real, is not balanced and consequently places a welcome emphasis upon the continuing need to rebalance the economy and upon investment.
Vince identifies four major areas of policy action in pursuit of a sustainable, balanced recovery. These are “boosting the disposable income of low and middle earners; stimulating business investment (with the help of public investment); taking action, including through the industrial strategy, to tackle bottlenecks in skills, business finance, exports and UK supply chains; and building lots of new homes”. There is much that could be said about his thoughts under each of these headings, but my eye was inevitably drawn to his comments on housing. [Read more...]