Lib Dem Vince Cable warning over spending cuts

Serious damage will be done to industry if only certain government departments are subject to spending cuts, Business Secretary Vince Cable has warned.

In a Guardian interview at the Lib Dem spring conference, he questioned whether departments such as health and development should be protected.

Mr Cable repeated his calls for more capital spending and called for pensioners' benefits to be taxed.

Such an approach has already been rejected by the prime minister.

Cabinet ministers are involved in tense discussions behind the scenes with the chancellor about future spending plans, ahead of the Budget on 20 March and a spending review in the summer.

The business secretary questioned whether some departments should be protected from spending cuts, saying that in his department they had reached the point where further savings would do enormous damage to science and universities.

He said he was disturbed that 85% of future deficit reduction should come from spending cuts and only 15% from tax rises.

Mr Cable called for pensioners' benefits such as the winter fuel allowance, free TV licences and travel passes to be taxed.

He repeated his call for more capital spending and said crucial sectors of the economy such as construction needed support.

"We have done very brave things in the first spending round, but we have now got to the point where further significant cuts will do enormous damage to the things that really do matter like science, skills, innovation and universities," he said.

BBC political correspondent Louise Stewart said the Liberal Democrats were trying to move the conversation on to the economy and away from the party's ex-chief executive Lord Rennard's alleged misconduct and the conviction of former Lib Dem cabinet minister Chris Huhne.

Question and answer

Lib Dem president Tim Farron, who will formally open the Brighton conference, has said the party was in a "critical state" and its survival was not guaranteed.

But the party's chief whip in the Commons, Alistair Carmichael, insisted on Saturday that the party was "in a much better condition than people in the press would ever want the general public to know".

Former party leader Lord Ashdown is to make a speech on Saturday, and current leader Nick Clegg will do a question-and-answer session with activists.

On Friday, Mr Clegg said the Lib Dems had "let people down" by not dealing with claims made against Lord Rennard, which the peer rejects.

He told delegates allegations of inappropriate behaviour towards women would be "investigated thoroughly and independently".

Meanwhile, Huhne and his ex-wife Vicky Pryce will be sentenced on Monday for perverting the course of justice.

Senior figures in the party are facing questions about when they knew of allegations Pryce had taken speeding points on her husband's behalf.