This is certainly a nightmare scenario. The polls do not point to it but the utterly heedless UKIP tendency are perfectly willing to risk it.
We are in grave danger of this scenario even without a hung parliament but it is foolishness beyond measure to seek such an outcome.
The total priority must be to save all our people from the immeasurable calamity that an economic collapse would entail. The UKIP tendency never pays the slightest attention to that. Do they think it will go away. They'd condemn theirr fellow Britons to the collapse that the Irish are having right now - but the Irish have one great advantage in that they are largely homogenous still - we are NOT! The social unrest here could be very dangerous.
You have been warned!
Christina
================================
TELEGRAPH 18.11.09
Fear of City turmoil if election delivers hung parliament
No one – except possibly Nick Clegg – wants a hung parliament.
By Andrew Porter, Political Editor
Such is the fear of what might happen if the country fails to deliver a decisive verdict at next year’s election that Ken Clarke has said he would rather Labour won than face such a prospect
Senior Cabinet ministers are filled with a similar dread at the prospect of no one party securing a majority.
Beyond the obvious reasons - namely that after all that effort and money spent no one wins - why the grave warnings?
In short it is because of the potentially devastating effect such a result could have on the financial markets at a time when the economy is still effectively on a life-support machine. Speaking as someone who was Chancellor for four years, Mr Clarke’s views have weight.
The shadow business secretary explained: “I do think that in the middle of an acute national crisis a hung parliament would be one of the biggest disasters we could suffer … that would be a bigger danger than a Labour victory.”
Even optimistic Labour ministers believe that a hung parliament could be as near as they can get a good result next spring. But that does not mean it is a prospect they relish – and the economically literate ones, like Mr Clarke, understand why.
One explained: “There is always this worry about new governments and we had in it 1997 when commentators asked whether Labour would be trusted by the City.
“But the truth is as long as you have a majority you can govern and the City has to deal with what cards they are dealt. What they will hate, and what could be very ominous, is the uncertainty of a hung parliament.”
What causes the greatest concern is the potential impact on the bond market, where the British government borrows by selling gilts. The markets want to know how the huge deficit is going to be paid down. George Osborne made his gloomy speech last month at his party’s conference because he knows he needs a mandate for a painful fiscal tightening.
The current calm in the City may be explained by the opinion polls which suggest Mr Cameron is heading for a decent majority and that the markets like his tough talk on the deficit.
But if Mr Cameron has no majority but has most MPs he would be forced to try and appeal for support in what is effectively a national emergency. Success would be far from certain. A more likely result would be horse trading, delay and dither, the opposite of what the markets will be demanding.
There would be a real question over whether the markets would be willing to lend to a Government that needs to sell £220 billion of gilts next year. [That's a real understatement! Their charges would go through the roof -cs]
A stalemate at Westminster could see market confidence drain away completely, leaving the UK facing a buyers' strike as no one is prepared to buy gilts. After that, the only place to go is the International Monetary Fund.
The likelihood is that there would have to be another election to resolve the electoral impasse. But by then months of uncertainty could have unnerved the markets and done severe damage to the fledgling economic recovery.
If they have not already, the Treasury and Bank of England should be drawing up plans to try and stave off any crisis in the event of no party winning a majority.
Posts
