Saturday, April 24, 2010

Tory claims that hung parliament would cause meltdown are dismissed.

David Cameron and George Osborne's claims that a hung parliament would result in "a sterling crisis and the intervention of the International Monetary Fund" have been utterly rejected by a leading credit rating agency and senior economists.

Analysis by The Independent suggests that of the 16 countries worldwide who currently have the top triple-A financial stability rating, 10 are run by coalition governments. The majority of nations that have taken the toughest action in recent decades to tackle their debts were also governed at the time by coalitions.
It's yet another example of Cameron and Osborne attempting to frighten people into giving them a majority government, which all of the polls say they are way short of achieving.

Arnaud Mares, its lead UK analyst, said: "A hung parliament does not in itself have direct implications for Moody's UK rating. The three main parties broadly agree on the desirability of fiscal consolidation on a scale that, if implemented strictly over the course of the next parliament, would be consistent with the Government maintaining its Moody's AAA rating."

Another ratings agency, Fitch, assessed Britain's prospects to be "stable", a view it said it had reached bearing in mind the possibility of a hung parliament.

The Standard and Poor's agency lowered its assessment to "negative" almost a year ago, when the Conservatives were in a strong opinion poll lead.

Sixteen countries currently enjoy a triple-A rating – awarded to nations deemed to have close to zero risk of defaulting on their debts – from the main credit ratings agencies. Ten, including Germany, the Netherlands, New Zealand, Sweden and Switzerland, currently have coalition governments and 12 use a form of proportional representation for elections.

History also suggests that having large majorities in government does not prevent crises of sterling. The 1949 and 1967 devaluations both took place when Labour had a clear majority. In 1985 sterling fell to just over $1 when Margaret Thatcher had a landslide majority, while in 1992 the Tories had a working majority when Britain fell out of the Exchange Rate Mechanism.

A hung parliament, especially one formed between Labour and the Liberal Democrats, could be highly effective. Indeed, the Liberal Democrats are enjoying a huge surge in their popularity and their policies are actually to the left of Labour on many issues.

I see very little chance of those two not being able to come to agreement on a way to move the country forward.

Cameron and Osborne are doing what they always do, insisting that the country vote for them... or else.

It's tiresome... and it's proving to be highly ineffective.

The country simply isn't buying what Cameron is selling. A few months ago I thought he was sailing towards Downing Street for the simple reason that he was not Gordon Brown. The nearer we get to election day - and the more people are asking what he is actually going to do - the further he falls in the polls.

Thirteen years of Labour rule have made this country far more progressive than the Tories imagine. And the person causing real excitement in this election is not Cameron or Brown, but Clegg.

And the platform he is pushing is further to the left than the Labour platform. And yet the public like what Clegg is saying. They find him refreshing.

Cameron, by refusing to ever say what it is that he is going to do, is forgetting the first rule of Thatcherism. Thatcher always outraged you by saying exactly what it was that she believed, and she enjoyed the fact that she had outraged you. But the fact that she had said what many of us regarded as unspeakable was the very thing which made a large proportion of the electorate see her as strong.

The person currently speaking the unspeakable - scrap Trident, embrace Europe - is Nick Clegg.

That's why he is soaring ahead in the polls.

Click here for full article.

No comments: