Anthony Painter

During the course of his dour yet gleeful cuts announcement, George Osborne made an intriguing- and quite probably Freudian- slip.

“In the space of just one week we have found and agreed to cut £6billion of wasteful spending across the public spectre.”

Correcting himself quickly, he continued apace with his job slashing announcement. And yet the spectre still hung over the courtyard of HM Treasury. Certainly, the assembled Mandarins (though many look more like digital entrepreneurs nowadays) seemed to be distracted. Maybe it was being out in the sun after so many years toiling in darkness. Or maybe they were looking at David Laws- yes, him with the sense of humour- and seeing some strange impish mythical creature.

Certainly, whatever was unleashed in that moment- let’s accept it was some form of spectre- had positively haunted Vince Cable by the time he was sat opposite Jeremy Paxman on Newsnight yesterday evening. He had the look of a haunted man. Gone is the swashbuckling economic exuberance. Instead all that seems to remain is inner terror.

His response when asked by Paxman whether he admired his colleague, George Osborne- oh, the humiliation- was the high pitched protestation of a guilty man in the dock presented with a hitherto hidden piece of evidence.

“It is not admiration. As a colleague we have a very good businesslike relationship.”

Ouch. And this wasn’t just the awkwardness of the curmudgeon. At its source is two elements: his lack of regard for his colleague, George Osborne, and an inner unease with yesterday’s announcement. That’s my hunch. Nothing more. But watch the interview and you’ll see. The only time in the whole thing that Vince Cable lights up is when taking about- the very welcome- investment in 50,000 apprenticeships. And at the end of the interview he offers the thanks of a torture victim set free by his interrogator.

For in his heart of hearts Vince Cable knows two things that the HM Treasury slashers don’t (no, I’m not going to get all Freddy or Jason on you.) Firstly, yesterday they actually took an enormous risk with the recovery- quite possibly an unnecessary risk. What this Coalition has chosen to do is replace potential job losses in a year’s time as a result of the planned national insurance increase for employers with certain job losses now. That will reduce growth, tax revenues, increase unemployment and benefit payments, and claw back some of the deficit reduction to some extent. As Paul Mason explained on the same edition of Newsnight, the cuts are a third of already anemic UK growth in 2010.

They may get away with it. And in fairness Cable and co are right that the turbulence in European sovereign debt markets does shift the risk. Equally, Cable knows that these cuts- though limited on the surface- actually cut deeper than may first appear. And that could have all sorts of impacts. 100,000 job losses is not insignificant. And though the sovereign debt situation is concerning, the early signals are that the UK is a safe haven rather than in the line of fire. But we do have to accept that can change very quickly (though the UK’s debt profile is longer term than Greece et al so it is more shielded.) However, Cable has also seen what happened in Japan when they cut public expenditure too early (which I’ve covered before.) You can end up with catastrophic consequences- and much greater debt.

So, despite the shifting international context, Vince Cable knows that the Coalition has taken an enormous risk. And very probably an unnecessary one. At the very least they have begun to undo Labour’s success in limiting the impact of the recession on unemployment.

And he also knows that an age of austerity could have a deleterious effect on both public services and the future growth potential of the UK if it is done too brutally or in the wrong fashion. The early signs are not particularly good. We all welcome the elimination of waste and the Coalition has transferred the theatricality of the Prime Minister into a governing philosophy by sending ministerial cars to the knacker’s yard. Fine. There will be tough choices but the mantra has become cuts above all else and Osborne-Laws seem to rather enjoy the machismo of it all. It’s a muscularity that is reserved for the least well-off- so Child Trust Funds go while generous pensions and savings tax breaks for the well-off remain.

And finally, Vince is haunted by one other rather important thing. His major contribution was a billboard ad, the focus of which was very clear. In the pit of his stomach he knows the spectre of the HM Treasury courtyard will not disappear into the ether quietly. It will come back again and again. And this will be its form:

The haunted look will remain and deepen. What possible exorcism could there be? For Vince Cable, salvation may only come on the backbenches once again. It’s personal. It’s political. It’s about pride and it’s about credibility. The haunting of Vince Cable has only just begun.