Vince Cable warns of second financial emergency
Vince Cable, the Business Secretary, faces a new confrontation with Chancellor George Osborne today after warning that Britain could face the “bomb” of a second financial emergency.
The Liberal Democrat Cabinet minister insisted that the country had not faced up to the full extent of the turmoil of the 2008 credit crunch – and said it was impossible to rule out a fresh crisis hitting the economy.
His warning will irritate Mr Osborne who argues Britain is out of the “danger zone” as the country begins to benefit from his tough economic medicine.
In an interview with the New Statesman, Mr Cable said he was worried by the “lack of popular understanding” about the “long-term impact of the collapse of the banking system”.
The Business Secretary cited the warning by the billionaire investor Warren Buffett eight years ago that the complicated financial arrangements of American banks were “time bombs” waiting to explode.
He said: “We really haven't engaged with the real depths and seriousness of the financial crash. You've got bits and pieces of regulation being put in place, but it's very piecemeal. The structure of banks are being addressed in the UK but nowhere else.”
Mr Cable added: “I was very impressed with that Warren Buffett metaphor that asset-backed mortgage lending was the atomic bomb, and that there are hydrogen bombs out there. I just don't think that collectively governments have got to grips with this at all.”
Asked whether another huge bomb could soon go off, he replied: “It’s not imminent. But you can see this happening."
His comments will strike a raw nerve with Tory coalition colleagues as Mr Cable was the first leading British politician to warn of the “unsustainable debt bubble” that burst nearly three years ago.
Earlier this week he was rebuked by Downing Street after suggesting Greece would have to reschedule some of its massive debts. Government sources rapidly distanced themselves from the remarks as it is the practice of ministers not to comment on the eurozone.
Elsewhere in the interview, Mr Cable admitted it was a “serious mistake” for Liberal Democrat MPs, including Nick Clegg, to sign a pre-election promise not to raise university tuition fees.
He quoted a colleague saying the party should be given “eight or nine out of ten for our policies, but one or two for our politics”. Mr Cable added: “I think that’s a fair assessment of how things are.”
- 1 Michelle Rodriguez: Fast & Furious actor apologises after telling 'minorities' to stop taking on 'white' roles
- 2 Raif Badawi, the Saudi Arabian blogger sentenced to 1,000 lashes, may now face the death penalty
- 3 PornHub turns masturbation into energy in bid to save the planet
- 4 Robert Mugabe eats a zoo for 'obscene' 91st birthday party
- 5 The remarkable archaeological underwater discovery that could open up a new chapter in the study of European and British prehistory
Michelle Rodriguez: Fast & Furious actor apologises after telling 'minorities' to stop taking on 'white' roles
Boris Nemtsov shot dead: Putin critic may have been murdered by Islamic extremists, says president-led committee
British are sexually uptight, dirty and drink too much – according to Spanish book
Raif Badawi, the Saudi Arabian blogger sentenced to 1,000 lashes, may now face the death penalty
PornHub turns masturbation into energy in bid to save the planet
New theory could prove how life began and disprove God
This is what it's like to be dead, according to a guy who died for a bit
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Ukip would cut billions from Scottish budget to fund English tax cuts
Russia's roadmap for annexing eastern Ukraine 'leaked from Vladimir Putin's office'
£9 per hour: Recruitment Genius: This role is based within a small family run ...
£28000 - £32000 per annum: Recruitment Genius: This Design and marketing agenc...
£46000 per annum: Recruitment Genius: This property investment firm are lookin...
£18000 - £35000 per annum: Recruitment Genius: This company specialises provid...