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Vince Cable warns against economic complacency Cable warns against complacency despite recovery signs
(about 5 hours later)
Lib Dem cabinet minister Vince Cable is warning the government against complacency over the economy. Lib Dem cabinet minister Vince Cable has said the government cannot be complacent about the economy despite growing signs of a recovery.
It comes two days after Chancellor George Osborne said the UK was "turning a corner" amid signs of recovery. The business secretary said he and other ministers "can't rest on our laurels" and "a few quarters of good economic data" did not mean the country was out of the danger zone.
But Mr Cable is due to say he and fellow ministers "can't rest on our laurels". Chancellor George Osborne recently suggested the UK is "turning a corner".
In a speech to business leaders he will claim that "a few quarters of good economic data" did not mean the country was out of the danger zone. But Labour says millions feel insecure, with living standards still squeezed.
Ahead of his speech, the business secretary told BBC Radio 4's Today programme the UK was experiencing the "beginnings of a recovery", but said it would not become "meaningful" until there was strong and sustained business investment. The latest unemployment figures showed a continued fall in the number of people out of work to below 2.5 million - although there was a rise in youth unemployment and the numbers in part-time work.
'Embarrassing slap-down' 'Dangers remain'
In a CBI conference speech at Warwick University later, Mr Cable is expected to say: "We can't rest on our laurels. In a speech to a CBI conference at Warwick University, Mr Cable said it was not "difficult to see evidence of confidence returning".
"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." There were "positive trends" in manufacturing and export growth which pointed to "the beginnings of a recovery story", he said.
However he is expected to add: "It isn't difficult to see evidence of confidence returning" and will talk of "positive trends in production". But efforts to create more balanced and sustainable growth, rather than relying on growth in the City and the property market, "won't simply emerge of its own volition", he added.
"Taken together with success stories like the car industry and export growth in emerging markets, we have the beginnings of a recovery story," Mr Cable will go on. "In fact, I see a number of dangers. One is complacency, generated by a few quarters of good economic data," Mr Cable said.
"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... as a share of GDP, is currently the lowest in the G7." "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... as a share of GDP, is currently the lowest in the G7."
Shadow business secretary Chuka Umunna said Mr Cable had issued an "embarrassing slap-down" to the chancellor. 'Embarrassing'
But Mr Cable denied the suggestion he was at odds with Mr Osborne, pointing out the chancellor had said the economy was "beginning" to turn the corner. Speaking to the BBC earlier on Wednesday, Mr Cable said the recovery was a "marathon, not a sprint" and it was "going to take a long time to get the British economy on the right track" and to rectify the mistakes made by previous governments.
He said he agreed with Mr Osborne's claim Labour's Ed Balls had been proved wrong in his criticism of coalition policy. He denied Labour suggestions that he was at odds with Mr Osborne and said he agreed with the chancellor that the opposition's criticism of the government's strategy and its call for a "Plan B" had been proved wrong.
But he told Today Britain's economy remained in a "long, dark tunnel". But shadow business secretary Chuka Umunna said Mr Cable's speech was an "embarrassing slapdown" to the chancellor.
"I don't want the public debate about this to become obsessive about a few weeks' data, when what really matters is the long-term change we're trying to achieve, getting Britain more outward looking, avoiding a return to the boom-bust psychology." "It also reminds everyone that you can't trust a word the Lib Dems say," he added. "Vince Cable has supported the chancellor's policies, which choked off the recovery in 2010."
He added: "The point I am trying to make is that this is a long-term haul. We have got a marathon not a sprint here. "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."
"It took us years of mistakes by governments to get us into this crisis, and it has taken five years to start to crawl out of it. The CBI's director general John Cridland said there was "gathering momentum" in the economy, but more needed to be done to correct the "profound economic imbalances which built up during the boom years", including developing a "coherent" industrial strategy.
"It is going to take a long time to get the British economy on the right track."