Marcus Evans Group | Worldwide Headquarters | American Offices | Latin America | European Offices | African / Asian Offices

Vince Cable rules out ‘coalition divorce’

Cable says he is ‘positively committed’ to the coalition ahead of keynote conference speech in which he will unveil plans to call time on spiralling boardroom pay

Follow the latest developments on our conference live blog

Vince Cable, the business secretary, has ruled out a “coalition divorce” as he outlined Liberal Democrat ministers’ commitment to turn the economy around.

Cable said he was “positively committed” to the government as he prepared to make his keynote speech at the Lib Dem annual conference, in which he will unveil plans to “call time” on spiralling boardroom pay.

Cable did a round of media interviews on Monday morning to flesh out his plans to force companies to publicly justify handing out multimillion-pound packages. But as delegates gather for the third day of the conference in Birmingham, he was pressed on the party’s relationship with its coalition partners after party president Tim Farron set the cat among the pigeons when he joked on the conference stage that divorce from the Conservatives in “three or four years” was inevitable.

Cable insisted he and Lib Dem colleagues are “most definitely not talking about coalition divorce”.

He told BBC News: “We are committed to the coalition government. We have a massive task to do to turn the economy around. It has to be done in an environment of fairness, which is where this issue of reward for failure comes in, but nobody is talking about divorce. We have to stick with the financial discipline – it is actually fundamental.”

As Lib Dem ministers take turns at the conference podium to reassure members that the party is punching above its weight in government, Cable was also asked about comments he made to undercover Daily Telegraph reporters last year in which he claimed to have a “veto” and could bring down the coalition government by walking out.

Asked on the BBC Radio 4 Today programme if he still believed he had a veto, Cable said he was not thinking in “those negative terms”.

“I am positively committed to the coalition,” he said. “We have got a long haul major task of sorting out the economy at the same time delivering fairness – we have got to get that right and I think my role in the coalition is an important one. I am business secretary, I am supporting economic growth while at the same time contributing to the very substantial cuts we have got to make.”

Cable was also pressed on a report in today’s Financial Times that a new £12bn black hole has opened up in the public finances. The forecast suggests the government will either have to prolong austerity measures into the next parliament, or introduce further spending cuts or tax rises to balance the books by the end of parliament.

The business secretary said he had not seen the figures cited in the FT and did not recognise them. “There is actually quite a lot of flexibility built into our existing fiscal plans and it’s very difficult to envisage circumstances in which the government would want to deflate the economy or take demand out of the economy,” said Cable.

In his speech to the party conference, Cable will take aim at corporate “rewards for failure”.

He will announce that all directors of firms listed on the London Stock Exchange will be required to clearly set out the total value of salary, shares, pensions and bonuses every year. From October firms must disclose the criteria used to determine their reward packages.

Cable told Today that giving shareholders a veto over the deals was “one of the options” and that he was “well-disposed” to the idea.

“What we want to do is reward success in business. We want entrepreneurs to succeed, be properly rewarded, [as well as] risk-takers [who bring] inward investment,” he said.

“What we do not want is rewards for failure, and the pattern over the last decade or so has been that there has been a massive increase in executive pay, management pay – 400% over a decade at a time when share prices for the owners have not increased at all and basic pay has not increased.

“Something has gone wrong in the market for senior executives and we want to resolve that.”

Conference will also debate phone hacking today, with calls for the press watchdog, the Press Complaints Commission, to be replaced with a body with power to impose large fines on newspapers that breach the code of conduct. The motion will also call for an increase in the punishment for those breaking the Data Protection Act so offenders can be sent to jail.

Delegates will also debate a motion criticising the large number of lengthy jail sentences handed down by the courts to those involved in riots this summer, and urging ministers to drop plans to make it easier for rioters and their families to be evicted from social housing.

On Monday afternoon the Lib Dem leader, Nick Clegg, will take questions from the audience. © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds