The Liberal Democrats’ sound money man

I met Vincent Cable recently at a dinner party with a mixture of City and business bigwigs: a few FTSE-100 bosses, a smattering of hedge-fund tycoons, the odd private-equity baron. The Liberal Democrat Treasury spokesman was the only politician at the table and the debate inevitably focused on financial worries: the credit crunch, Northern Rock, the soaring oil price, foreign takeovers of British companies. There was quite a bit of hand-wringing by the business chiefs, but the shy, mild-mannered Cable gave as lucid and articulate a defence of open markets and free trade as I have heard from any political leader. It was impressive stuff — and afterwards I noticed that several guests went up to tell him so.

Since then, Cable’s stock has soared in Westminster and the City. As acting leader of the Lib Dems since the resignation of Sir Menzies Campbell, he has perhaps been lucky that the big political issues have all been in the economic sphere. Throughout the Northern Rock crisis, he has been one of the few MPs who has appeared fully to understand what’s at stake — in terms both of moral hazard and of cost to the taxpayer. His performances at PMQs have been so telling that he is heard in near-silence — a rare honour for a Lib Dem leader. Much more of this, I suggest to him, and a party once ridiculed for its wacky economic policies will start to be seen as the party of sound money — a virtue traditionally associated with stern, unbending Tories.

Cable insists he’s always been a sound-money man and that the caricature of his party is unfair. ‘I’ve just been reading some of Jo Grimond’s early speeches and I was struck by how he was ahead of his time. He was calling for education vouchers and health insurance and standing up for open markets and free trade back in the Sixties, when the paternalistic Tories were more concerned with protecting GB plc and Harold Wilson was nationalising everything.