Vince Cable ruffles feathers with attack on 'murky' corporate behaviour

The Business Secretary doesn't have to be an incessant cheerleader for UK plc. But he doesn't need to slag it off, either.

by James Taylor
Last Updated: 19 Aug 2013
Generally speaking, when a slightly pinko Lib Dem MP has a pop at the business community in his party conference speech, nobody bats an eyelid. But it's different when the individual concerned is the Business Secretary - hence why Vince Cable finds himself under the cosh this morning. The wide-ranging review he’s just launched into 'corporate governance and economic short-termism' is fair enough - the events of the last couple of years have shown that UK plc clearly has room for improvement in both areas. But we're not convinced that the guy who's supposed to be the Cabinet's business champion should be talking about the 'murky world of corporate behaviour'...
 
Cable's review - which will run alongside the Takeover Panel's review of the M&A rules - will look at ways to encourage corporate Britain to take a longer-term focus, including ways to boost shareholder engagement and restructure director incentives. That's a pretty broad remit, and given recent events, a not unreasonable one (although as with all these things, the extent to which the Government can actually change the rules to avoid future Cadburys will be severely constrained by EU law).
 
But what has raised hackles across UK plc is some of the rhetoric Cable was planning to use in his Conference speech today (as leaked to the papers in advance). Not content with slagging off 'short-term investors looking for a speculative killing, while their accomplices in the City make fat fees' or directors who 'forget their wider duties when a fat cheque is waved before them', he even has a pop at capitalism as whole, which he says 'takes no prisoners and kills competition where it can.'
 
As CBI boss Richard Lambert laconically points out: 'It will be interesting to hear his ideas for an alternative.' His predecessor Lord Digby Jones was also hopping mad on Radio 4 this morning, arguing that although Cable is right that we need better (enforced) regulation, the Business Secretary shouldn't be creating the impression that business is 'always at it'. The Telegraph goes even further, suggesting that Cable's credibility 'is almost completely diminished' and that he should think about resigning.
 
We don't believe that the Business Secretary's role is purely to cheerlead for UK plc; he or she should also be making sure the right rules are in place, and holding companies to account when they flout them - because that's in the best interests of business as a whole. But we can't help feeling that the Business Secretary shouldn't be fostering the idea that corporate Britain is a hotbed of malpractice, however well it goes down with his party. Though Cable himself insists that his comments have been taken out of context; that he remains pro-business and isn't a loony lefty who's been given this job as a sop (ok, so we're paraphrasing with this last bit).
 
Still, perhaps it's daft to read too much into this. It's Conference week, and the Lib Dems are bound to indulge in a bit of gallery-playing as they try to appease the recalcitrant grassroots. Of course the rhetoric matters, because it affects the way business is viewed by the population as a whole. But ultimately, the substance of the changes matters more, and hopefully there calmer, more measured voices will prevail (even if only because their hands are tied by the EU).

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