Before, he was known as St Vince, the straight-talking, ballroom-dancing MP who predicted the crash. Five years on, Vince Cable is without a job – and ready to lift the lid on the Tories

Vince Cable is looking remarkably well for a dead man – politically dead, that is. The May election deprived him not just of his cabinet job as business secretary, but of the Twickenham seat he had held for the Lib Dems for 18 years. There is no more brutal arena than politics; no end more sudden or public. He walked into his count at just before 5am on 8 May as one of the most powerful men in the country; he walked out humbled, his majority of 12,000 overturned. At 72, he says he will not contest another election.

The only word I can conjure up when we meet at his home in the shadow of Twickenham rugby ground is bereavement. Was that how it felt? “It was initially,” he says in his precise, slightly strangulated voice. “But I adjusted to the new world very quickly.” He has finished a book on economic policy since the crash, taken a holiday in Corsica (he is tanned: his wife Rachel says he looks 10 years younger), joined a gym and returned to ballroom dancing – a long-time love, as the trophies on top of a cupboard in the living room attest.

Cable was offered a peerage in the wake of his defeat, but turned it down (he did accept a knighthood). “I’ve done 18 years in parliament, and all the stuff around whips and late-night voting, even in the gentler environment of the Lords, I’m happy to leave to other people,” he says. “And I don’t want to go into an institution that’s overcrowded and unreformed.” Instead, he is preparing for the national ballroom championships, pondering another two books, working with a startup bank, angling for an academic job.

During the dying years of New Labour, Cable was dubbed St Vince for predicting the financial crisis of 2007/8 and for seeming to be above the fray. The public trusted him; journalists liked him. There were no moat-cleaning expenses. Cable lives in a modest semi; as business secretary, he prided himself on travelling by train and carrying his papers in a rucksack, rather than the expensive red boxes sported by Tory junior ministers as they were ferried around by limo. By all accounts, he treated his team well. “An awful lot of politicians are bullying and unreasonable,” his former special adviser Giles Wilkes says. “I found him not. He wasn’t like The Thick Of It, and quite a lot are. They are often abysmal managers who compensate by being tyrants.”

How does a politician, especially a saintly one, deal with rejection? “We knew from a year out there was a risk of losing,” Cable says calmly. “It’s helped that there are other things I want to do. It isn’t as if I’m stepping into a bottomless void.” But Emily Walch, another of his special advisers, says the night of the defeat was traumatic; at the count he looked shellshocked, hands clasped as if in prayer.

“I spoke to him at about three in the morning,” Walch recalls. “I could tell his heart had already sunk.” Afterwards she went home and cried. “It felt as if there’d been a death in the family. I spent the whole of Friday grieving, and didn’t call or text, to give him some space. I rang on the Saturday, which was his birthday, and he was eating cake and sounded quite chirpy, as if he could already see the benefits of the freedom imposed on him.”

Cable’s new book, After The Storm, a look at the post-crash global economy, is the first fruit of that freedom. After toeing the line for five years, he can go public with his criticisms of chancellor George Osborne’s handling of the economy. He warns that the emphasis on consumption rather than investment, the continuing reliance on house price inflation as the driver of growth, the decline in productivity and innovation mean fundamental problems are not being addressed. He is also the first minister to lift the lid on the coalition: we learn the Tories could be likable colleagues but “collectively appalling, with ugly tribal prejudices”; that Osborne and David Cameron were unable “to move Theresa May an inch”; that Osborne’s Treasury effectively controlled government, with a hands-off Cameron; and that, in Cable’s view, Nick Clegg and Danny Alexander were too accepting of the Treasury line.

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Back in 2010, it was no secret Cable would have preferred a deal with Labour. “I’d had links with Gordon Brown. He was difficult to get to know, but we had a rapport and I respected him. We met from time to time, trying to lay the foundations for what he called a progressive alliance.”

In the days after the election, Clegg focused on negotiations with Cameron, while Brown and Cable kept talking. “I had several conversations with him at antisocial hours,” he says. “In my case, and in a lot of my colleagues’ cases, we had a more natural affinity with Labour. But it was clear the numbers weren’t there, that for a lot of leading Labour people their heart wasn’t in it, and that from the point of view of Nick Clegg and others, Brown was the problem, not the solution.”

Cable, a Labour parliamentary candidate as long ago as 1970, who also stood twice for the SDP in the 80s before migrating to the Lib Dems, did not find the Tories natural bedfellows. “It was a difference between heart and head: my heart was definitely not in it, but when you tried to think about it rationally, it was the right thing to do. We had a series of meetings when we were negotiating the coalition agreement, and I stood up and said, ‘I really do not like these guys, I’ve spent my life fighting them. But the economic situation is very serious, and we’re going to have to swallow our prejudices and get on with it.’”

Does he think Clegg made an early mistake by appearing to enjoy being in bed with the Tories? “I felt from the outset we should be businesslike and semi-detached, whereas he felt we had to persuade the public that coalition government could work. And to have too many arguments initially would have given the impression we were ferrets in a sack.” Does he blame Clegg for the rout in May? “No. It was a collective responsibility. I don’t think pointing the finger is sensible.”

I wasn’t involved in a leadership coup. People who wanted change wanted me. It was guilt by association

Cable with Nick Clegg. Photograph: PA

He won’t say so, but it is clear his relationship with Clegg became strained. “Economics was never Nick’s strong suit,” says the Lib Dem peer Matthew Oakeshott, a long-standing friend of Cable’s. “In opposition, it was almost a father-and-son relationship. But gradually, as Nick’s advisers told him to assert himself, it got more difficult. Slowly, that avuncular relationship changed.”

It may also be that early in the parliament Cable was inclined to believe in the idea of Saint Vince. He saw himself as the vital leftish cement in the coalition mix, and says his “head before heart” speech was crucial in persuading his colleagues to back a deal with the Tories. But hubris led to nemesis when, in December 2010, he claimed to two undercover Daily Telegraph reporters posing as constituents that he could bring the government down if he chose to resign over the direction of economic policy, and that he had “declared war” on Rupert Murdoch’s News Corporation, which was trying to take over BSkyB. He came very close to resigning, had responsibility for media policy taken away from him, and appeared vain and boastful – a middle-aged man trying to impress two attractive young women.

“I wasn’t saying it in a boastful way,” he insists. “I was just making the point that it was the early days of the government, we were at a difficult stage, and unless both sides of the coalition stuck together it would fall.” As for Murdoch, he says this was a point of principle, not a vendetta. “There was an issue about media concentration of ownership. People forget I did refer it to the competition authorities. Had that not happened, the BSkyB takeover would have taken place.”

Was vanity the reason he fell for the sting? “No. Some of the press wanted to get a nice story about these two beautiful women, but from what I remember they weren’t particularly beautiful. The reason it went pear-shaped was that it was the night we had a riot over tuition fees outside my constituency office. There were people banging at the door, police sirens, all the constituents who had come to see me about legitimate things had vanished. I was really quite charged up, these two women came in and wanted to talk about tax credits, and I let my guard slip. In a less emotionally charged environment, I wouldn’t have done. It was nothing to do with sexy women flattering me. I may be vain, but that isn’t a good example of it.”

One Lib Dem who worked closely with Cable suggests his pride was wounded by coalition politics: he didn’t like being ignored, belittled and briefed against. Early on, Osborne launched a charm offensive of cosy chats. But once Clegg, Alexander and David Laws had a lock on policy, Cable was marginalised. That must have hurt.

He is critical of the way government devolved to the so-called Quad of Cameron, Clegg, Osborne and Alexander. “I understand why it happened,” he says. “Nick Clegg was trying to establish parity with the Tories, and a two-and-two negotiation made sense. And Danny Alexander was a close ally. But it meant you had two party leaders and two Treasury ministers. So the economic orthodoxy of the Treasury, which in some crucial respects was damaging and wrong, was reinforced. It was very difficult to challenge anything.” Alexander was far too “on message” for Cable’s liking, and many Lib Dem insiders report tensions between them. I call Alexander, but he doesn’t ring back.

***

We break for photographs, and Cable turns out to be an uncomplaining subject, even demonstrating a few dance moves in the garden. But Rachel, a formidable former dairy farmer, has eventually had enough, and with a snap of her fingers draws the session to a close. A bird flies in through the kitchen door, with me and Cable in hot pursuit. The former business secretary remains unnaturally calm, as if this is an everyday occurrence.

On Strictly Come Dancing. Photograph: BBC

Cable didn’t enter the Commons until his mid-50s and in many ways this shaped his parliamentary career, not least because it telescoped the chance for him to become leader. He didn’t stand in 2006 when Charles Kennedy was ousted, because Ming Campbell was seen as the “safe pair of hands” the party needed; when Campbell stepped down a year later, the Lib Dems felt a need to turn to youth. Time and circumstance conspired against Cable.

Being 30 years older than most of his coalition colleagues conditioned his relationships in government. “Vince had a reputation as a lone wolf, partly because he was generationally above most of his peers,” Wilkes says. “I don’t think he had a natural ‘pick up the mobile and call Nick’ temperament. He was used to ploughing a lonely furrow.” That was fine in opposition, but in government it enabled the Tories to isolate him.

Cable argues that there were advantages to his age. “I knew things and I had done things. I was a contemporary of Norman Lamont at Cambridge, and he was retiring when I was arriving. But I think I did it the right way round.”

He puts his lifelong commitment to politics down to his background – the son of a working-class father he describes as a “diehard Tory with the prejudices to match”. “It wasn’t sophisticated politics, but there was a lot of raw, bad-tempered political debate around the dinner table.” His childhood was in many ways difficult: his father was a disciplinarian, his mother had a breakdown soon after the birth of his brother, when Cable was 10; in his 2009 autobiography Free Radical, he alluded to occasional domestic violence.

A further source of alienation from his father was that Cable married Olympia Rebelo, a Kenyan Indian with a PhD in history from Glasgow University. His father objected to a mixed-race marriage. Cable and his wife were together for more than 30 years, and her presence is palpable in the Indian books and ornaments that fill his home, but she was diagnosed with breast cancer in 1987 and died in 2001. “She lived for 14 years with cancer, and knew for five or six that it was terminal. She was in the prime of life and had bags of energy, and it was difficult trying to be positive, while at the same time being realistic. She threw herself into setting up my MP operation, and died a few days after I was re-elected in 2001.”

In 2004 Cable married again, having met Rachel just four months after Olympia’s death. He says his three children found this difficult at first, but “by the time Olympia had died, I was reconciled to the idea. I had grieved for her when she was alive, I suppose. I wanted to move on and do other things. I met Rachel and we lived happily ever after, but it was difficult for her family and mine.”

***

I ask Cable what he is most proud of having achieved in government. He points to various policies – an industrial strategy, a green investment bank, an apprenticeships scheme, introducing shared parental leave and flexible working, getting women on the boards of major companies. But even more important, he says, is what the Lib Dems stopped: with a majority Tory government, we are now seeing nature blue in tooth and claw.

“Without anybody really noticing, Osborne has increased considerably the scale of cuts,” he says. “They are committed to taking another £40bn out of the economy. The housing policies are appalling. They are taking the pressure off the banks in a way I wouldn’t have supported. Historically, the coalition will be seen as a success, and people, once they have seen Tory government on its own, will realise the difference. Absence makes the heart grow fonder.” It sounds like self-justification, I say. “I have to be an optimist,” he counters.

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In many ways the coalition already feels like ancient history; when Cable and I discuss Clegg and Alexander – omnipresent on the airwaves just four months ago – we seem to be summoning up ghosts. I suggest the achievements of the Lib Dems are outweighed by the opportunities missed, especially the chance to change a voting system that looks increasingly anachronistic.

“The AV [alternative vote] referendum was a disaster,” Cable admits. “The Tories were frightened by it, and very cynical. The thing I thought unforgivable was that their donors, clearly with the knowledge of the Tory leadership, were putting money into campaigns that were personally trashing Nick Clegg – over things like tuition fees, where the Tories were to the right of us. They got their way, but any illusions that remained on our side that these were soulmates disappeared.”

The accusation of cynicism – Cable uses the word three times during our conversation – is an odd one coming from a former government minister. Saintliness, though popular with the public, is double-edged. Politics is a dirty business and corners have to be cut, liberties taken – otherwise you lose. The Lib Dems were outmanoeuvred at every stage in the coalition, and would perhaps have been stiffened by a little more self-interest.

On the subject of cynicism, Cable singles out Osborne, whom he describes as “extremely shrewd politically, but very cynical” – one imagines the chancellor would take that as a compliment. “He is engaging, a good listener, and highly intelligent, but he focused on political strategy and didn’t really engage with economic stuff – he took that from the Treasury. The economy turned out all right, but I don’t think that was because of him.”

In Cable’s view, Osborne was the key figure in the coalition – the master strategist, whereas Cameron was “pretty hands off” – and is likely to succeed Cameron unless the economy hits fresh storms, though he doesn’t rule out May. “I fell out with her badly over immigration. Throughout the whole five years, we never saw eye to eye [Cable opposed an arbitrary cap on migrants]. But she’s a very formidable person, strong and effective.”

Facebook Twitter Pinterest With Michael Gove, George Osborne and David Cameron. Photograph: Stefan Rousseau/PA

Successful politicians tend to convince themselves that their underhand behaviour is for the good of the country. Cable’s tendency to set himself above the battle underlines the fact that he is not a career politician. “The thing to remember about Vince,” Oakeshott says, “is that he’s an academic. He’s not really a professional politician. That’s a great strength and part of his public attraction, but also a weakness.”

The word “academic” comes up repeatedly when you talk to friends and colleagues, inevitably perhaps with someone who has a PhD in the industrialisation of developing nations and taught economics at Glasgow University. “Vince was always concerned to get the right policy outcome,” says Chris Huhne, a cabinet member until he was forced to resign in February 2012 – a departure that deprived Cable of a key ally on the left. “Maybe someone who was more political would have been more concerned about the selling of politics.”

Ahead of the 2010 election, the Lib Dems pledged to abolish tuition fees, but as business secretary Cable steered through a policy that saw fees treble to £9,000. “On that big issue he got it badly wrong,” says Mark Pack, editor of the monthly newsletter Liberal Democrat Newswire. “He takes a heavy degree of responsibility. But there is an odd Teflon quality about him – a lot of activists were very angry about tuition fees, but they blamed Nick Clegg and said how lovely Vince Cable was.”

“I’ve endlessly gone over in my head what we might have done differently,” Cable says now. “There was always scepticism about abolishing fees, but our national executive insisted on retaining this totem. That was the disaster.”

He was also attacked over the sale of Royal Mail, with critics arguing the price was too low, but here he has fewer qualms. “Royal Mail had to be put into the private sector if it was going to raise money for investment – which is what it’s done, though nobody seems to have noticed.” He argues that an independent report into the share offer supported the price his department had set. “It was traumatic at the time,” he says, “but in the end I felt we had been largely vindicated.”

The other time Cable’s political antennae let him down – and the parliament’s other great might-have-been – was the 2014 attempted coup against Clegg. In May, as the party prepared itself for disastrous results in local and European elections, Oakeshott and backbencher John Pugh sought a change of leader. Oakeshott commissioned polls in key Lib Dem seats, including Twickenham, the results of which suggested the general election would be apocalyptic for the party. The plan was to oust Clegg, who was already having doubts about carrying on, and install Cable; Oakeshott leaked his findings to the Guardian to force the issue.

Patrick Wintour and Nicholas Watt, writing in the Guardian in June, concluded that the coup had the “tacit support of Cable”. Stephen Lotinga, the Lib Dems’ head of communications, told them he phoned Cable – on a trade mission to China at the time – with an ultimatum: “Distance yourself from this, or you and Oakeshott are going to be named as the people behind it.” It was a bluff (Lotinga had no evidence), but it succeeded. Cable publicly distanced himself from the plot, backed Clegg and said there was no issue over the leadership. “Never go to China if you want to mount a coup,” was Lotinga’s satisfied conclusion.

Cable disputes much of this account. “I wasn’t connected with it,” he says calmly, betraying not the slightest suggestion that he blew his moment to seize the crown. “There were some MPs who felt it might improve matters if we had a change. I wasn’t involved, but was in the awkward position that a lot of people who thought there should be a change wanted to change to me. There was guilt by association. But it wasn’t quite as it was portrayed in the more machiavellian histories.” Cable is choosing his words carefully here: “not quite as portrayed” is hardly a thundering denial.

“He didn’t want to strike,” one of those who favoured a change tells me off the record, “but he had made it clear he was willing to take over. I think if he’d kept his mouth shut and not declared his loyalty to Clegg, there would have been a change. Vince wanted the leadership on a plate, but shot the waiter bringing it to him.”

Chris Huhne, however, doubts whether he was ever set on the leadership: “If Steve Lotinga managed to bully Vince out of it, it suggests his heart wasn’t in it.” Walch agrees: “He’d already been leader, albeit briefly [he was acting leader in 2007 after Ming Campbell resigned]. The thing he was interested in above all was economics, and the job he would have loved was chancellor.” In any case, by 2014 it was too late; the party’s image was already terminally tarnished. Even Saint Vince would not have worked a miracle.

***

We meet at the height of Corbynmania and, unlike many commentators, Cable does not dismiss the new messiah of the left. Perhaps he sees in Saint Jeremy traces of the plain-speaking, tube-travelling Saint Vince. “I’ve seen him in parliament for 18 years and he’s a straightforward man with a lot of integrity,” he says. “I also remember him from my days in the Labour party in the late 1970s, and he was one of the hard core [on the far left] that did terrible damage to the party. I can see that being repeated. But I don’t want to minimise the significance of this movement he’s created. There is a large group of people who are very alienated and looking for radical solutions, mainly young people shut out of secure jobs and housing. They are looking for someone to rally round – and unlike the late 70s and 80s, there is a mass movement.”

What would be most likely under Corbyn, he says, is further fragmentation on the centre-left and the “slow death of Labour England”. But he insists the Lib Dems will recover from their crushing defeat in May. “The election was an enormous setback for the idea that you can have the best of both worlds – be a radical centre-left party but soil your hands in government. The public walked away from that, but I still believe we will be vindicated in the long run. There has already been a kind of buyers’ remorse: ‘We voted Tory but did we really intend it?’

“It’s a long way back, but membership is going up, and unlike in the Labour party, there is a sense that we’ve touched bottom. We can only go up.”