Vince Cable Warns 'Social Fabric' Could Be Affected By Harsher Cuts

Business secretary Vince Cable has said he is "concerned about the social fabric" of the UK if spending cuts continue and the gap between rich and poor widens further.

"We have got to have a sensible balance on public spending cuts – which is getting very severe – some very good services are now being seriously affected," the Lib Dem MP told the BBC's Andrew Marr show.

Cable admitted that the coalition's abolition of the 50p tax rate had "not been a great political success, but we are not arguing for a reversal".

Vince Cable has concerns about the UK's 'social fabric'

He said a mansion tax would be a "very, very appropriate thing to do" in the current economic climate.

"There is a raging housing boom, in London and the south east but not in other parts of the country," he said.

"The danger of raising interest rates is that you hit those parts of the country which are not yet fully recovered, you push up the exchange rate and that hits manufacturing.

"We don't want that. On the other hand, if you do not increase interest rates -– if that is the way the governor and the Bank of England go – then this boom that is taking place in housing prices gets out of control and the only people that can afford to live in large parts of London are foreigners and bankers, and we don't want that either."

"We certainly do need to look at that [Help to Buy] again. I notice that the ratings agency Standard & Poor's is expressing serious concerns on that front. It was conceived in different circumstances."

"We can be proud as a party of what we have done in government, lifting large numbers of low earners out of tax altogether," he continued. "We will argue for a fairere tax system, the Conservatives want to go in the opposite direction. We will be arguing on a very, very distinct agenda on tax when the election comes.

Cable was also probed on immigration, given his party leader Nick Clegg's comments in the Observer that the Lib Dems would block any attempts to further curb migration from the EU.

“I think there’s a bigger picture here, we periodically get these immigration panics, I remember going back to Enoch Powell and ‘rivers of blood’ and all that, and if you go back a century there were panics over Jewish immigrants," Cable said.

“The responsibility of politicians in this situation when people are getting anxious is to try to reassure them and give them facts and not panic and resort to populist measures that do harm.

“I think what’s happening here is the Conservatives are in a bit of panic because of Ukip, reacting the way they are, it’s not going to help them politically but it’s doing a great deal of damage."