The best business advice, opinion, news and expertise in Greater Manchester and further afield.

Friday, 30 April 2010

Friday Guest Blog: What a hung Parliament may mean


By Jon McLeod - Chairman of Weber Shandwick Public Affairs


The manifestos have been published, the TV debates aired and by this time next week the last vote will have been cast – we will have heard it all. But has it been enough? Going on today’s polls the Conservatives are ahead with 34% of the vote, with Labour having 29% and Liberal Democrat, 28%.

The Conservatives may be ahead in the polls but in terms of forming the next Government but nothing is certain and a hung parliament is still a realistic outcome.

So, what does that really mean? A hung parliament is one in which no party has an overall majority, which means no party has more than half of MPs in the House of Commons. In the simplest terms, Labour will lose its absolute majority if it loses 24 seats and the Conservatives will gain an absolute majority if it gains 117 seats – which would include winning 25 seats from the Liberal Democrats to ensure a majority of one. Any result in between will result in a hung parliament and a coalition between the two parties with the most votes.

The concept of a hung parliament often evokes the response that it will have a detrimental effect on the UK economy. Political leaders and key financial markets will expect the new government to have a clear and concise strategy to address the nation’s debt. The coalition parties will have to agree the way forward swiftly as there is potential to slow down the decision making process and the actions required to ensure a responsible economic recovery. However a clear majority government can also make the decision making process long and costly.

Making two parties work together can possibly serve the national economic interest by forcing the executive to focus on good governance and economic management. This actually happened between 1976 and 1978, when the Liberal-Labour pact called the economy to order, brought the inflation to heel and introduced fiscal discipline.

But with six days left of campaigning, there’s still time for momentum to shift – will the Lib Dem momentum fall by the wayside, will Labour bounce back when it comes to the comfort ‘better the devil you know’, or will the country agree ‘it’s time for change’ and welcome David Cameron into Downing Street. As Harold Wilson said, a week in politics is a long time and an interesting 6 days await us all.

No comments:

Post a Comment