‘The Storm’ by Vince Cable, published by Atlantic Books

I thought that Vince Cable’s pre-election reputation as the most convincing politician in all three parties, and his surprising entry into the cabinet, would make this a good book to review. I also enjoy reading about politics and thought that, like most books by politicians, there would be some good gossip and ‘knockabout stuff’.

I was surprised and disappointed on a number of counts. Though the book contains a good analytical summary of the causes of the financial crisis – made more credible by the fact that he was one of the few that saw it coming – it is boring and repetitive. It is also very short of anecdotes and real-life examples, revealing Cable’s background as an economist more than his business experience with Shell.

His main point is that the boom of the UK Economy in the first 10 years of Labour government was built on false confidence due to three factors:
• The success of the financial services sector
• An openness to overseas investors
• The perceived well being of consumers due to the property price boom

These three factors led Gordon Brown to proclaim that he had abolished boom and bust and consumers to build up unprecedented levels of debt based on ‘an illusion of wealth’. A similar illusion in government encouraged them to throw cash at the public sector like never before. This made the economy unable to cope with the global recession when it came and has led to our current predicament.

He also points quite critically to the fact that we, more than any other economy (other than Iceland) are suffering from the ‘Icelandic disease’ where the banking sector has outgrown its host economy, thus placing the taxpayers with excessive and unreasonable risk.

Cable is less convincing when it comes to solutions, which does not perhaps bode well for the new coalition. He wants to change the tax system to reduce avoidance and unfairness and ‘remove equalities of wealth, income and opportunity’. There is far too little mention of the need to encourage entrepreneurship and investment, which is not encouraging from the new Secretary of State for Business. One must hope that, like many others who face the reality of government responsibility, his views become more balanced and practical in office.