Wednesday, 25 November 2009

Hung Out to Dry

Interesting and increasingly topical article in today’s Independent by Steve Richards, who is hoping for all the drama and back door deals that a hung parliament would bring. It can be found HERE.

I like Steve Richards’ stuff but I can’t help feeling that he is viewing this through the prism of the Westminster bubble (can you view a bubble through a prism?). Anyway, I’ve no doubt a hung Parliament would be hugely exciting (particularly for the political commentators), but I worry about its effect on the economy and wider business confidence as a whole. From where I am standing, business badly needs the certainty of a Government with at least a workable parliamentary majority (circa 40-50 seats). What it certainly does not need is for the current ‘limping along’ to carry on past a General Election. If it was anything like 1974 that would mean circa 5-6 months of limping before a second election in the late Autumn.

In recent days I’ve had two conversations, one with a client and one with a former colleague, both of whom have echoed this same point. My client, acutely aware that the Conservative Party has vastly different views on the climate change debate in comparison to the current Government, wants clarity on key proposals, particularly in relation to renewable technologies and their finance. My former colleague, (I’d call him a City Grandee but he’s only 46, sorry John!) rightly pointed out that relations between the main parties are so fractious that a governing coalition is all but impossible. He’d like a public information campaign to warn the public of the dangers of having Brown, Cameron and Clegg squabbling for six months (God forbid!).

As ever, the financial markets will be first to deliver their verdict and I would be more than willing to bet that the FTSE will take a serious hit the day after an election if we have no outright winner.


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