It is counterintuitive but sometimes a logjam is just what you need to get things done. On my way to Liverpool Street station last night, for example, I couldn’t cross a busy road for ages – until the traffic went into gridlock.
Might the same principle apply to the UK government’s ablity to cut the UK deficit in the not unlikely event of a hung parliament?
If, after the general election expected in May, no party has enough MPs to form a government, we could end up with a coalition of ministers forced to sit and reflect on each other in a cross-party traffic jam. Traditional opponents, under pressure to interact constructively, might just conceive the best of all possible plans to cut the deficit.
Well … we can all dream. But the City isn’t quite so upbeat.
“Equity investors would just assume there would be policy stasis, infighting, indecision,” Leigh Harrison, head of UK equities at Threadneedle, the UK’s third largest retail investment fund manager, warned this week according to MoneyMarketing.
The budget deficit needs to be cut and “a hung parliament will delay that,” Richard Batty, investment director of strategy at Standard Life Investments, told the FT.
Yet Martin Wolf, the FT’s chief economic commentator, appears to add some credence to my gridlock reverie.
A hung parliament is a “bogeyman” used to terrify British voters, he writes in today’s paper: “So poorly has single-party despotism governed the UK that I would welcome a coalition or, at worst, a minority government.” (See this BBC site for the mechanics of both scenarios.)
Martin Wolf continues:
I can see no reason why it would be more difficult to implement the needed tightening under a coalition government. On the contrary, the legitimacy needed to take on the principal opponents of the cuts – the public sector unions – will be far stronger with a more representative government. Greater legitimacy is, after all, why the UK had a coalition government in the second world war.
Also in the FT this week, Robert Hazell, joint author of a paper called “Making Minority Government Work” describes how such an arrangement could be a success at Westminster: “The opposition can no longer blindly oppose, because its decisions determine whether the government wins or loses.”
Minority governments have been perceived at Westminster as weak, unstable and short term, he says. But they need not be:
In Scotland and New Zealand recent minority governments and parliaments have been highly effective, running their full course, with clear strategies and programmes. In Sweden it was a minority government that led the 1990s fiscal stabilisation programme … [In the UK] a hung parliament and minority government would require a cultural shift away from deeply held majoritarian assumptions. In most parliamentary democracies it is the norm. Not so in Britain, but there is no need for anyone to panic as long as everyone is ready to learn the new rules.
The phrase “government of all the talents” comes to mind. When Gordon Brown entered Downing Street in 2007 he aimed to recruit expertise from across the political spectrum. Former CBI boss Sir Digby Jones and Lib Dems Lord Lester and Baroness Neuberger were among his so-called “goats”. Former Lib Dem leader Lord Ashdown was also approached but the idea was blocked by Ming Campbell, LibDem leader at the time.
So Vince Cable for chancellor of the exchequer in a David Cameron government then?
The Liberal Democrat’s Treasury spokesman, the favourite choice for readers of Accountancy Age, is “far better qualified to address this [fiscal] challenge than any current member of the Conservative front bench”, says Martin Wolf.
Cable’s business pedigree could make him just the “lollipop man” we need.