LONDON – The UK’s fiscal consolidation plans are causing
‘angst’ across the country, Business Secretary Vince Cable admitted
tonight.
Responding to a question from former UK Chancellor Alistair
Darling, Cable also said that he didn’t think the private sector growth
was ‘axiomatic’ if public sector spending was withdrawn.
“I don’t believe private sector spending automatically takes the place
of public sector spending. You need a combination of things, including
lax monetary policy,” Cable said
But Cable insisted that spending reductions are necessary and that
the stg6bn cuts announced shortly after the election in May had
already had an impact on market interest rates.
“The impact of the cuts in the early days of the government, which
were controversial, and I accept I’ve changed my views on it, were
actually quite substantial.”
“If you look at the spreads over the last few months, we have moved
from being in the Spanish, Greek, Italian ballpark to the German and
French and that is quite important,” he added.
Cable also said that his own coalition government’s immigration
limit is causing ‘great damage’to British business.
“It is doing great damage, I am faced with examples every day of
companies that want to recruit internationally and cannot,” he said.
Cable also bemoaned the impact of the Comprehensive Spending
Review, details of which are due to be announced on Oct. 20, stating
that:
“I have the horrible job of trying to defend my (deparmental)
budget which is not protected and has some very valuable things in it,
like higher education.”
–London bureau: 44 20 7862 7492; email: wwilkes@marketnews.com
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