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Cable to attack 'crisis inaction' Cable: 'RBS would break Scotland'
(1 day later)
Deputy Liberal Democrat leader Vince Cable will accuse the Scottish and UK governments of failing to tackle the economic crisis. The collapse of the Royal Bank of Scotland would have wiped out the budget of an independent Scotland, the deputy Liberal Democrat leader said.
He will tell the Scottish Lib Dem conference that Labour's VAT cut has been ineffective and expensive. Vince Cable said the RBS balance sheet was 15 times the size of Scotland's gross national product.
And he will also warn delegates that First Minister Alex Salmond's focus on an independence referendum is a distraction during the recession. The Edinburgh-based bank, which lost £24bn last year, is 68% owned by the UK Government after a massive bail-out.
Mr Cable will urge Mr Salmond and Gordon Brown to work together. Mr Cable told the Scottish Lib Dem conference he was unsure whether the UK could cope with the banking burden.
In his keynote speech, Mr Cable will call on Mr Salmond and the prime minister to join forces to beat the economic downturn, rather than "picking fights with each other and grabbing photo ops in the USA". On the prospect of RBS collapsing, he said: "What would an independent Scotland with this giant bank attached to it have done?
Guaranteed income "Probably they would just have had to default - but that would be the equivalent of letting a hydrogen bomb explode in the middle of the financial system."
He will also praise Scottish Liberal Democrat leader Tavish Scott for strongly opposing the takeover of Scottish-based bank HBOS by Lloyds. Crisis 'warning'
The conference, which is taking a strong focus on the economy, will also debate calls for a £7,000-a-year guaranteed income for students. "They could not have done that, they would have had to have gone for help. This is what a proper debate on nationalism should mean in the present environment."
And members of the party faithful will also discuss radical plans to shift control of most taxes to Holyrood. He said the capital that had to be put into RBS to keep it going would be roughly equivalent to the entire Scottish budget.
The proposals would include new powers for the Scottish Parliament over drugs, firearms and energy. Mr Cable, who also speaks on Treasury issues, went on to welcome Tory leader David Cameron's apology for his party's failure to spot Britain's economic crisis at an earlier stage.
Day two of the conference, in Perth, will also feature a live webcast with Tavish Scott and BBC Scotland political editor Brian Taylor, from 1030-1100 GMT, using questions sent in by readers. "It would have been rather bigger of him if he had also admitted that the Liberal Democrats did see this coming, and we did warn about it," he told delegates in Perth.
And Mr Cable accused Labour of making "a pact with the devil" when it came into power, "embracing" the banking community and the City of London and turning a blind eye to its failings.