Thoughts on politics and life from a liberal perspective

Tuesday, 2 March 2010

Would a hung parliament be so terrible?

There is much coverage this morning of the market dip yesterday which seems to be being attributed to the possibility of a hung parliament.

The first thing I want to say is that my suspicion is that the markets are really dipping on the possibility of Labour being the largest single party (and hence in minority or coalition government) following the 2% Tory lead YouGov poll at the weekend. There being a hung parliament has been a distinct possibility for quite a while but a 2% Tory lead on a uniform national swing would make Labour the largest party. I think that is what the markets are reacting to.

But for a moment let's consider the possibility that what the markets are really spooked about is a hung parliament even if the Conservatives are the largest party. My response would be why? There are plenty of countries around the world who manage their economies perfectly well without one political party having total control. Also, do the markets seriously think that George Osborne is the only person who should steer us into recovery? Surely if he was forced to listen to expertise from other parties such as Vince Cable in order to decide what to do then he is less likely to make mistakes?

I hope that the Conservatives do not start to try and use the market wobble as evidence that the country must give them an overall majority. The British public will not take kindly to being coerced into voting a particular way by market sentiment. Don't forget, many people feel that they have been royally screwed over by these very same markets in the last two or three years.

If anything, I would suggest that a time of economic crisis such as now is the very time that a government needs to win arguments (rather than whip them through) and carry the majority with them.

Wasn't it George Osborne himself who said we are all in this together?

1 comment:

Cardinal Richelieu's mole said...

"I think that is what the markets are reacting to" - could be, but in fact no.

What the markets do not like, as always, is uncertainty becuase they find it hard to price.

A hung parliament likely means a government chosen in what would once have been "smoke-filled rooms" by inner cabals of horse-trading politicos - or else a weak, "lame duck" government brazening it out and daring the opposition to bring it down. Neither of these outcomes are indicative of the sort of decisiveness and determination the markets want to see.