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Clegg defends Cable over attack on City 'gamblers'

Vince Cable stepped up his attack on the City of London with a searing attack on "spivs and gamblers" in the Square Mile whose greed had taken the economy to the edge of disaster.

The Business Secretary was unrepentant yesterday about the backlash he has faced over his criticism of unbridled capitalism and his pledge to curb excessive executive bonuses and irresponsible company takeovers.

He told the Liverpool conference that he must be doing something right if he had managed to infuriate the bank bosses. With anger growing in the business community, Nick Clegg was drawn into the row, issuing a forthright defence of Mr Cable as "an extraordinarily authoritative, popular and insightful politician".

The Deputy Prime Minister, who is in New York for a United Nations conference, said: "He, as a free-market liberal, believes you have got to look after the small guys as well as the big guys. Competition is really, really important in any modern, market economy. You can't allow big players on the block, whether it's legal or financial or any other, to crush competition under foot."

Mr Cable's comments, which were applauded by the Liberal Democrat faithful, had been seen in advance by Tory Cabinet ministers who are understood to be relaxed about the remarks.

They also believe the Business Secretary's aggressive stance chimes with the voters' mood, particularly as a new round of bumper bank bonuses are likely to be announced within months. However, there will be fears in Conservative ranks that he could risk being sidelined if he plays too regularly to the Liberal Democrat gallery.

Mr Cable told the conference he shared voters' fury about the City's behaviour in the run-up to the financial crisis. "I make no apology for attacking spivs and gamblers who did more harm to the British economy than [railway union leader] Bob Crow could achieve in his wildest Trotskyite fantasies, while paying themselves outrageous bonuses underwritten by the taxpayer."

Richard Lambert, the director-general of the Confederation of British Industry, said he did not believe it was "sensible to use such emotional language", adding: "Mr Cable has harsh things to say about the capitalist system – it will be interesting to hear his ideas for an alternative."

Lord Digby Jones, who was a trade minister in the previous government, accused Mr Cable of behaving like a "Liberal rabble-rouser".

* At least 10 per cent of shares in Royal Mail will go to staff under plans to inject private capital into the postal industry, Mr Cable told the conference. He said it would be the biggest employee shares scheme of any privatisation for 25 years.