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DERMOT MURNAGHAN: I am joined now by Vince Cable, the Lib Dem former Business Secretary, he’s in the New Forest, a very good morning to you Mr Cable. Let’s start with the subject of tax credits, you may have seen me discussing with your leader in the House of Lords, Lord Newby, the Lib Dem, and Lord Heseltine is warning about there, isn’t your party and the House of Lords playing with fire here if it does kill off this measure?  

VINCE CABLE: No, absolutely not.  I do agree with Lord Heseltine that questions are being raised about the role of the House of Lords but the best way to establish public credibility is to stand up on an issue of this kind where there clearly, with the mainstream of public opinion, with informed opinion which has shown that cuts in tax credits will do terrible damage to low income working families and I think the House of Lords have a very good opportunity to make themselves relevant and important by standing up on this issue.

DM: But people throw straight back to you, maybe not you but to the Liberal Democrats because I know you turned down a seat, you want to abolish the House of Lords so surely you can’t lead the rebellion in this way?  

VINCE CABLE: I believe and my party believes that the House of Lords should be democratically elected and achieve legitimacy in that way but it is what it is and it has an important role in approving legislation and acting as a check on the government of the day, that’s what it should do.  This government that we have at the moment, Conservative government, was elected by 37% of the people who voted in May, they don’t represent the whole of the country and the House of Lords has an opportunity to be useful and block something that is very damaging as well as unpopular.   

DM: Just give a sense, you say it’s damaging and unpopular, was this a measure that was tried to be brought through during the course of the coalition years, is this something that the Lib Dems were able to block for five years?

VINCE CABLE: Well I had responsibility when I was in government for the minimum wage and every year I followed the advice of the Low Pay Commission which gave an indication of what was a sensible level of pay reflecting the conditions in the economy and where low income families were concerned this should then be topped up by tax credits.  Well what this government did was adopted a gimmicky move to a higher minimum wage, against the advice they were given and then used it as cover for taking away tax credits for millions of low earning families making them substantially worse off.  I think three million people will be £1000 a year worse off, the poorest families in the country.  It was opportunistic, cynical, bad economics and it’s not surprising it’s run into trouble.  

DM: But just personally, you lost your seat, so many of your colleagues lost their seat in the general election, isn’t there part of you privately that’s been thinking towards the electorate, we did tell you about this, we told you so, we were keeping the nasty party in check?

VINCE CABLE: Well we did, yes, in this and in a whole manner of ways.  I mean I don’t want to be in the position of gloating because they’ve got into trouble but the coalition is going to be remembered with some affection the longer this government goes on because they are pursuing, despite all the language about being a centre party, pushing the agenda well to the right.  We have seen this on tax credits, increasing the depth of cuts to extents which are no longer economically but are now ideologically driven.  The problem we are going to have next month with the spending review [break in sound] … which are way, way off the centre of politics and when we were in coalition we got a good balance, we had checks and balances in government, and that’s gone now and we’re seeing much worse government emerging.

DM: And are we seeing that in the area that I was just discussing with Lord Heseltine, which partially you were responsible for while you were in government, industrial strategy. You were in favour of targeted intervention, very targeted but in the right places, are we now seeing the Conservatives reverting to type and saying, right, let rip the market forces, there’s no holding back the global tide?

VINCE CABLE: Well I don't think any of us know what’s happening because there’s a complete lack of clarity in this area.  When we had a coalition government we had a very good industrial strategy which reflected agreement across the parties actually, the Conservatives, Lib Dems, Labour, all bought up to what was happening.  We had very extensive buy-in from the business groups, it was not based on overriding the market, it was going with the flow of the market but nonetheless working in partnership with business on a long-term perspective, dealing with the kind of things like supporting innovation in industry, long term training and the steel industry is a good example. You have a very good company, Tata, that has invested for the long-term in Britain but they do need some support from government in those areas where government is able to act and I was heavily engaged in issues around the steel industry for several years and it was very clear that they suffered from a problem of excessive energy pricing caused by our own government.  I and my colleagues sought approval and got approval from the European Commission to get compensation and some has been paid but I do sense there is some foot dragging going on in the Treasury to stop the industry receiving the kind of support that would …

DM: Sorry, we just had a slight glitch there Mr Cable, just let me ask you finally, I mentioned you turning down a seat in the House of Lords, is that it for you then and formal politics?  No attempt to come back into the House of Commons perhaps later?

VINCE CABLE: No, I’m not planning to come back to the House of Commons.  I’m doing a lot of interesting work, I’ve just published a book and I’m going round the country promoting it, happy to do academic work, charitable work, a bit of business.  No, I’m having a very fulfilling life and I certainly want to remain in touch with politics but by influencing the public debate.  I don’t need to be in parliament and I’m leaving that now to others.   

DM: And that you have just been doing, Mr Cable, very good to talk to you, thank you very much indeed. Vince Cable, the former Business Secretary there.