Margareta Pagano: It's a shame more don't share the vision of Vince

Cable's right to care about planning for industry

I've just come back from visiting a country where the people are so nervous of their politicians that they daren't even say the name of their president out loud; instead they make signs with their hands. It doesn't matter which country I was in.

So flying back to the storm over Vince Cable's leaked letter to David Cameron setting out his views for a more coherent industrial policy, I couldn't help but laugh out loud at the media circus which this provoked. But it was refreshing too; we forget at our peril the freedom to criticise and you could even forgive the headline writers for getting a little over-excited with the way they presented the Business Secretary's letter as a "split" in the coalition.

Let's be careful not to exaggerate – this looks more like an old-fashioned argy-bargy about tactics and a healthy part of what, we all too casually, call our parliamentary democracy. Trading views is the oxygen of the political process, and it's often through argument that the best ideas evolve; only one-party states suppress competing ideas.

We should be reassured the Business Secretary cares enough about the country's industrial renaissance that he puts pen to paper setting out his criticism, and his recommendations. It's been evident for some time that Vince Cable has been frustrated with his coalition partners, mainly George Osborne at the Treasury, about the lack of a more joined-up industrial policy. What he says in the private letter is not new, but sets out in a more robust form the concerns he's been expressing for months. It also fits with what he told EEF, the Engineering Employers' Federation, at its annual conference last week.

He supports the strategy of cutting the deficit, keeping interest rates low, trying to promote exports to emerging markets, but fears there is something missing, "a compelling vision of where the country is heading beyond sorting out the fiscal mess; and a clear and confident message about how we will earn our living in future". He's right and it's surprising more of his Cabinet colleagues don't agree with him as there is no disagreement that growth is the only way to economic recovery.

It's odd that they are so against spelling out such a vision; what are they scared of? Cable is not calling for a Soviet-style command structure that backs lame-duck industries. Quite the reverse – he wants to pick our finest and back them to the hilt – the automotive industry, pharmaceuticals and high-tech engineering to name a few. What's more, he says we should be looking ahead, bringing together schools, apprenticeships, training and universities to peer into the future and take appropriate action.

At the same time, more should be done to protect companies such as BAE Systems and EADS that are being threatened by European overcapacity. Whether Cable's right on all these ambitions is academic; the point is we need the debate to arrive at solutions.

Nor is it a Lib Dem left-wing view. Indeed, most of Cable's concerns are echoed by many senior Tories as well as whole swathes of British industry, including Sir John Parker, chairman of Anglo American. It's interesting to note that Cable wrote his letter to the PM on 8 February, the day after Sir John called on the Government to do more to create a long-term industrial strategy to guide UK plc. If you change the names, it could have been Parker who penned Cable's letter as he also urged government to take a more dynamic role in economic growth and do more than just "cutting overheads, important as that is".

Industrial policy is still a dirty word in the UK, partly because there have been so many disasters carried out in its name by Labour and Tory governments. But times have moved on; industry is now so sophisticated it needs forward planning. Innovation needs backing in universities, and companies need more relief for R&D.

And it's a myth that the state can't be effective as an enabler – look at how the Automotive Council has been so effective with the Government working together with industrialists and companies in the supply chain.

One of the most common complaints about governments is that they are short term in outlook, that they only exist to win again. If this coalition is to survive, it should seek to prove us wrong and listen to Cable. We have some of the world's top businessmen and women – people like ex-chief executive of Rolls-Royce Sir John Rose and Sir John Parker – and they should be asked by the Cabinet pronto to set out their vision.

In return for giving industrial policy a makeover, maybe Cable can be persuaded to drop his mansion house tax. Now that would be a trade.

Barclays can feign deafness until investors decide Diamond is paid too much

You couldn't make it up. Barclays boss Bob Diamond is to get £17m in pay, shares and perks for last year despite profits falling. He is also to be awarded even more in shares which will pay out in up to three years' time and the bank is to pay £5.7m to cover his tax bill.

Barclays justifies paying its top executives so much by claiming it has never received direct taxpayers' money. This is baloney since Barclays has benefited from the Bank of England's measures ranging from the early Special Liquidity Scheme to the latest quantitative easing programme which has kept the financial system afloat. Thus, arguing that it's not a beneficiary is disingenuous in the extreme.

Barclays also justifies paying such high bonuses because executives have fulfilled their roles on improving capital ratios, deleveraging the balance sheet, meeting lending targets and return to shareholders. But has it? As Andrea Leadsom, Tory MP and scourge of the banks, points out, return on equity is down while dividends to shareholders have been reduced.

But the bigger issue is that the banks are still not lending to the real economy. Leadsom points out that only 2 per cent of the balance sheets of the UK's four biggest banks is lent to personal customers and small business. The rest is used to trade the more lucrative sovereign debt, corporate bonds, forex and derivatives products which are zero-rated. So long as it's more profitable to trade such risk the banks will keep lending to such activities rather than to small businesses that are 100 per cent rated.

That's why Leadsom backs breaking up Royal Bank of Scotland – not as Vince Cable proposes – but by splitting it into constituent parts to create more competition.

She's right; introducing more competition into banking is also the best way to shake-up Barclays, and to wake up its shareholders. Sadly, it doesn't matter how much the public rants and raves because Barclays is clearly deaf. It's only when investors decide Diamond is being paid too much there will be any change.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Ashdown Group: Training Coordinator - Financial Services

£32000 - £38000 per annum + benefits: Ashdown Group: A highly successful, inte...

Recruitment Genius: Business Development Executive - Affiliates & Partnerships

£20000 - £35000 per annum: Recruitment Genius: This multi-award winning foreig...

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Day In a Page

No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor