Cable Warns About 'Complacency' Over Economy

Vince Cable is to warn about "complacency" over Britain's economic recovery, insisting ministers cannot "rest on our laurels".

The Business Secretary will say later that "a few quarters of good economic data" does not mean the country is out of the woods.

The comments, in a speech to business leaders, come just two days after Chancellor George Osborne declared the economy was finally "turning a corner".

Mr Cable will also highlight the risks of the housing market "getting out of control", echoing critics of Mr Osborne's flagship Help-to-Buy scheme.

The senior Lib Dem's intervention is likely to revive old tensions with the Chancellor after several clashes in the past.

In his address at Warwick University, Mr Cable will admit that there are "encouraging" signs on the economy but declare there is still further to go.

"We can't rest on our laurels. The kind of growth we want won't simply emerge of its own volition. In fact, I see a number of dangers. One is complacency, generated by a few quarters of good economic data," he will say.

"It isn't difficult to see evidence of confidence returning, and there are positive trends in production. Taken together with success stories like the car industry and export growth in emerging markets, we have the beginnings of a recovery story.

"But there are risks, not least the housing market getting out of control. Recovery will not be meaningful until we see strong and sustained business investment - and this is still 13% down on its 2008 peak and, as a share of GDP, is currently the lowest in the G7."

George Osborne recently hailed the change in economic fortunes

Mr Cable will stress that the improving economic news does not mean that the need for long-term re-structuring and re-balancing could be forgotten.

"If we are to turn the British economy around on a sustainable basis there will have to be relatively rapid growth of exports and import substitutes," he will say

In a further sideswipe at Tory critics, he will also emphasise the need for the Government to have an industrial strategy, following a series of "classic market failures".

He will point out that Britain's growth rate for creating advanced skills put the UK just 20th out of the 27 Organisation for Economic Co-operation and Development countries.

But he will also argue that his work on industrial strategy will last beyond the election because it is supported across the business world and political parties.

Shadow business secretary Chuka Umunna said Mr Cable had delivered an "embarrassing slap-down" to Mr Osborne.

However, he insisted that the Lib Dems could not distance themselves from the Chancellor 's economic strategy.

"It also reminds everyone that you can't trust a word the Lib Dems say. Vince Cable has supported the Chancellor's policies which choked off the recovery in 2010," he said.

"Three wasted years of flatlining that has left families worse off and done long term damage to our economy is his record and he should take responsibility for it."

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