Cable hopes to generate light from heat

First Clegg, now Cable – the Lib Dems really are putting their all into this year-end attack on the bankers. In an interview with the Sunday Times (£) today, the Business Secretary speaks unequivocally and with some zeal. “We’ve got to…start shining a light onto what’s actually going on at the top of the leading banking institutions,” he says, “If you keep people in the dark, you grow poisonous fungus.” And just in case you were wondering which half of the coalition is wielding the anti-fungal torchlight, Cable makes sure to add that, “standing up to militant bankers is probably more difficult for [the Tories].” The subtext: we took on the students, you’ve got to do this one for us.

Question is, how much can actually be done? The City’s bonus pot is expected to be smaller than it was earlier this year – but that is because of reduced profits, not state action. And when it comes to lending, a full return to growth will achieve more than any amount of harsh rhetoric ever could, or has. As I said on Friday, the government doesn’t have many options for implementing proper change in these areas, especially not in the short term. Cable can insist that “you just can’t give in [to the banks] the whole time,” but the question he hasn’t yet answered is: so how will you stand up to them, then?

In truth, the Tories and Lib Dems could reach a productive compromise on the longer-term restructuring of banks in this country – particularly if they follow the principles outlined in the Tories’ underrated White Paper from before the election. But that’s not going to help Cable & Co. across the next few months. Unless all this talk translates into quick and direct action, then – in the current political climate – this could start looking like another broken Lib Dem promise, of sorts. Stir in the Oldham by-election, and a cheerless New Year is at least a possibility.