by Stephen Tall on February 7, 2010
Here’s how the Financial Times reports it:
A hung parliament might frighten the markets, but according to Vince Cable, Liberal Democrat Treasury spokesman, the concerns are “completely and totally irrational”.
The Lib Dems point out that many of the world’s leading economies, including Germany and Italy, hold elections that almost always produce results where the leading party has to do deals with smaller parties. They add that some countries with single party governments, such as Greece, have some of the worst records in dealing with fiscal crises, while multiparty coalitions, such as the one in Sweden in the 1990s, conducted fierce fiscal controls.
The paper quotes Vince saying, “Our own approach to fiscal policy is at least as robust as that of any other party.” It also notes the Lib Dem deputy leader’s advice that having a broad political consensus will be vital for any government trying to push through the inevitable painful cuts of the next few years.
The FT makes a fair point of its own, mind. The uncertainty the markets fear is not that the Lib Dems if allowed into government will let control of public spending rip; rather “the possibility that a minority government would be forced to hold another election within months”.
True enough. Of course, there’s an easy solution: proportional representation combined with fixed-term parliaments would be more likely to allow the formation of a stable coalition which commanded majority support and able to govern for up to four years. Now if only there were a party proposing such a policy …