ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS

DERMOT MURNAGHAN: The Liberal Democrats have suffered so badly from being in coalition with the Conservatives that they may not be able to fight the next general election, that’s according to Lib Dem peer Lord Oakeshott, one of the Business Secretary, Vince Cable’s closest allies. Let’s say a very good morning to the Business Secretary and deal first of all with some of the outcome of those elections, you know the picture better than most but let’s remind the viewers, from the Liberal Democrat point of view falling below 3000 councillors for the first time in your history, fourth in London, only two Assembly Members and the base demoralised. The alarm bells must be ringing for the Liberal Democrats.

VINCE CABLE: Well it was a bad result, there’s no point glossing over that but our activists, our councillors are tough resilient people, they’ve had to be, fighting over the years and I think the way back is this, they recognise the government has to stay the course, we have a massive problem sorting out the problems of the economy, it’s not an easy thing to do, we’ve got to stick with it. They at the grassroots are going to try and rediscover what Liberals have always done best which is good community politics using the new powers they’ve got under localism legislation and as a party we’ve got to maintain our identity, we’re going to work in the coalition but by the time we get the election we’ll be an independent force with our own values competing independently and I think those are the elements that will form the basis of our recovery.

DM: Do you agree though with Lord Oakeshott, I quoted him there in the introduction to you, he’s also said with that base demoralised with the activists taking it in the neck so comprehensively during those elections, that you might not be able to fight the general election in 2015 as effectively as you would like.

VC: Well obviously you need to have a strong base in order to fight an election but I’m more positive than that. I talked to an awful lot of our council leaders and our MPs over the last few days trying to get … they’re tough people. We’ve just got in to central government, we’ve been out of central government for the best part of a century and many of our local councillors got there the hard way, they fought hard, they’ve accepted defeats in the past, they’ve gone back, they are resilient people and I think they do understand that what we’re doing in central government is a very tough long haul and they will stay with us. I am much more optimistic than that.

DM: Do you agree, we’ve heard from the Chancellor this morning, George Osborne and I just wonder in a way whether you feel a bit vindicated after that letter you wrote to the government, to Cabinet, which was leaked and which talked of a compelling vision of where the country is heading. Does George Osborne seem to be admitting that this morning, saying you need to get that message out there more clearly?

VC: Well I think the basic message he was giving, which is one that I agree with, which is that the government has really got two essential economic tasks. One is to have proper control over the public finances which is something we’re doing but at the same time we’ve got to get on with a whole set of policies to create growth and jobs and that’s very difficult given the enormous problems we’ve inherited of a collapsed financial system and the difficulties we have overseas with the problems in the Eurozone and high oil prices and the rest of it but we’ve got to put in place measures which get investment going in infrastructure and housing, getting the banks lending to business – they’re still not doing it – and that’s got to go alongside continued financial discipline in reducing the deficit. I think that’s what the Chancellor was emphasising and I agree with that.

DM: But we’ve been hearing that message from you and of course the Chancellor for two years, if you haven’t managed it by now how are you going to manage it in the next three?

VC: Well because there are no miracle cures. I think it is often underestimated the scale of the problem we’re faced with. We faced for the first time in almost a century a complete collapse of the financial system, a massive recession, Britain is now round about 10% poorer than it was before the financial crisis. Rebuilding the economy, not just sorting out the public finances but getting business investing, concentrating on exports, developing an industrial strategy which is what I was talking about in that letter you referred to, these are things that don’t happen overnight and in particular sorting out the banking system which almost disintegrated, it was stabilised and we’ve now got it doing economically useful things which it hasn’t been doing, and turning that round is not something that can be achieved overnight but we are absolutely committed to doing it and that’s the core task of the coalition.

DM: But let me put that back to you again, that letter you referred to “you lack a compelling vision of where the country is heading”, how do you get that right?

VC: Well I think what I was talking about in that letter was something we are agreed on which is that as one of the key elements in our economic policy, we need to have what we called an industrial strategy, backing some of the key successful industries, and let’s not forget that amidst all the economic gloom there have been some very, very big positive investment commitments, companies like Nissan, Jaguar Land Rover, committing hundreds of millions of pounds to investing in Britain, creating new jobs. We need to do an awful lot more of that, the Chancellor in the Budget gave his support to additional measures, supporting the aerospace industry for example. We’re going to do a lot more of that kind of thing to get the economy going.

DM: But you know the arguments and they are coming from activists on both sides of the coalition, perhaps particularly from the Conservatives this morning, saying as you’re saying, we really have to concentrate on the greatest issue not just facing our nation but so many others, the economy and these Conservative activists saying what are we doing messing around with sidebar issues it seems which are taking up a lot of time, a lot of column inches, like Lords reform and gay marriage?

VC: Well none of us know what’s going to be in the Queen’s Speech in a few days’ time but I’m pretty confident that I’ll be able to introduce legislation which is about jobs and growth and supporting enterprise and getting rid of red tape and competition and dealing with executive pay, you know, bread and butter issues of that kind. Now that’s where the government is going to be devoting a lot of energy. I’m confident that we will be able to bring forward legislation completing the reforms of the banking system, splitting the casinos from normal business lending, these things are promised to do and these things we’re going to deliver. I don’t quite understand why there is quite so much excitement about this House of Lords issue. I’ve been in Parliament for fifteen years, it’s been endlessly debated, there is agreement between all three parties about broadly what needs to be done. The Conservatives campaigned on House of Lords reform in three general elections and if they could just quickly and quietly get on with this and concentrate on the core economic issues which you quite rightly say most people in the country are worried about.

DM: But it’s interesting though what you say about Lords reform, Mr Cable, because we’ve heard from Liberal Democrats that it’s a key issue from them and the argument that now’s not the time is not appropriate is because it never seems to be the time.

VC: No, I certainly didn’t say that, I said it is something that needs to be done but there is no reason why it should take a lot of time or energy because it is something that the three main parties are broadly agreed that it is completely inappropriate to have a second chamber of parliament full of people who are there because of heredity and because they were appointed by the government of the day on political grounds. That’s got to change, it’s got to have legitimacy, we’re all agreed on that, let’s just get on with that quietly and quickly and concentrate our energies on the real task of this government which is turning round the economy.

DM: Could the same be then said for gay marriage, get on with that quietly but it’s not really a priority?

VC: Well that certainly is the case and I’m not even aware that there are any proposals to bring in legislation on it. There is some consultation taking place on whether the existing arrangements are satisfactory or not and I don't know who is whipping that particularly controversy up, it’s certainly not a priority issue as far as the immediate future is concerned.

DM: Can I just ask you about another issue, it seems to have been doing damage particularly to the Conservatives, this is relations with News Corporation. We know of course the arguments that have taken place about when your department was in charge of that, you were quoted as saying you were declaring war on the Murdoch empire and that role was moved to the Department of Culture, Mr Hunt took that over. Do you feel again vindicated by the stance that the Business Department took in terms of contacts with News Corporation executives, you kept them arms’ length, and the different approach it seems taken by the Culture Department?

VC: Well I certainly do feel vindicated and I certainly dealt with it in an entirely proper and fair way but the overall approach of the government has as you know been dealt with by the Leveson Inquiry, it was set up by this government, my party was very active in pushing for the establishment of the Leveson Inquiry. That’s where Ministers and others are going to be heard, setting out their evidence, and I’m one of them and I’d rather leave it to that forum to decide what happened and what should have happened, rather than just extemporise in this way.

DM: But there must have been a hand over point between your departments, as I say, when the responsibility was moved from the Business Department to Culture, did you have any discussions with Mr Hunt at the time about how you think he should have handled it?

VC: Well as I say, I think we’re getting beyond the general issues of principle which I’m very happy to express a view on and have done, on to the details of what happened and it is the whole purpose of the Leveson Inquiry to establish that on the basis of fact and I want to leave it to that Inquiry.

DM: Okay, well just on the issue of principle, lastly on this Mr Cable, when you have a quasi-judicial role as a Secretary of State, you believe you should have an arms’ length relationship with anybody who is trying to influence your judgement?

VC: Well that’s part of having a quasi-judicial role, a quasi-judicial role is about being independent and objective, I certainly was and as far as government as a whole, that is being dealt with through the Inquiry.

DM: So Mr Hunt, in your estimation, didn’t share that view?

VC: Sorry I’m not making any comment whatever on what Jeremy did or didn’t do. Various accusations have been made, he has every right to answer them, I’m sure he will and he will be appearing as I will in front of the Inquiry.

DM: Okay, I’m going to move on to the Budget and again what the Chancellor has been saying this morning, quoted in the papers and indeed on television and it is back to this issue of the economy. The presentation of that, and I’ve got an interview coming with the Speaker I’ve conducted a bit later on, I suppose it has parliamentary ramifications, in that so much of that in terms of the big policy, the big decisions, was leaked in advance that what happened then is that people like me and the commentariat concentrated on some of what you I suppose would call some of the more minor parts of that budget and it’s caused you an awful lot of damage.

VC: Well I think that’s what the Chancellor has been saying this morning, that there was a communications issue around the Budget but in apologising as it were for the communications, we’re perhaps rather missing the main point, that the real substance of the Budget was absolutely right and very positive. I mean the big story of the Budget was that hundreds of thousands, I think over a million people have been lifted out of tax, particularly low wage families are having their taxes cut and people at the top end of the scale in income and wealth are having to pay more. I mean that was the big story behind the budget and let’s dwell on that rather than Cornish Pasties which, you know, there are technical issues in that system but that’s not what the Budget was primarily about.

DM: Business Secretary, thank you very much indeed. Vince Cable there.