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Wait and see

Stephanie Flanders | 13:27 UK time, Friday, 7 May 2010

Like the rest of us, investors are in wait and see mode. If it happens, and that is a big if - the debate will turn to what kind of budget a Conservative minority government could get the Liberal Democrats to support.

Pound coinsTraders sold the pound this morning; it has now lost several cents against the dollar. But with so many other countries also under pressure, there's a shortage of currencies to fall against.

On a trade weighted basis, the pound has not been badly hit today, though of course it has fallen plenty this year.

As others have reported, gilt futures fell sharply overnight, and the FTSE fell sharply at the opening. But there's been no rout - in fact so far the FTSE is having a better day than many markets on the Continent.

The leading ratings agencies have all come out saying the election result will not change their immediate view of the UK - or threaten its AAA credit rating anytime soon. This, from one senior analyst at Moody's:

"Moody's stance assumes that the incoming economic team can muster convincing parliamentary support for a fiscal adjustment that is no looser nor slower than was outlined by all three political parties during their respective pre-election campaigns...The lack of a one-party majority will undoubtedly create political uncertainty in the short and perhaps also the medium to longer term. Nevertheless, Moody's view is that it is not the political but the policy outlook that matters most."

Establishing what, exactly that policy outlook will be is of course all that we will be talking about for the coming hours and days. Let me just throw down a few guide posts.

On two of the big economic issues of the election - when to cut borrowing and how much to raise taxes - the Liberal Democrats and Conservatives were on different sides.

The Conservatives wanted to cut spending this year - the Liberal Democrats said it was important to wait. The Conservatives went into the campaign promising a net tax cut - relative to labour. The Liberal Democrats promised a small tax rise.

This doesn't like fertile territory for a deal - tacit or otherwise.

But, luckily, "the big economic issues of the election" were not the big economic issues facing the country. The most important question for any international investor is whether the next British government will be committed to cutting the deficit.

On that question all three parties agree, and even on the details, the Liberal Democrats and the Tories are closer than you might think.

Both Vince Cable and George Osborne have said in the past that the government's deficit reduction plan was not ambitious enough.

And both have expressed a desire to limit tax rises on labour income - though the Liberal Democrats channelled this desire into radical tax reform for the lower paid, not delaying Labour's National Insurance rise.

You can, in short, see the outlines of a budget which the Liberal Democrats could support on the day: maybe £3bn in spending cuts this year instead of £6bn; maybe using the proceeds of the bank levy to pay for a targeted tax cut for the low-paid. The problem, for investors, would be what comes before that - and what comes after.

We don't yet know that the Tories will be in the Budget-writing business in a few weeks time. The question of political reform could stand in the way.

And even if they are, we can't know whether the Liberal Democrats will continue to support the Conservatives down the road, when the going gets tough and voters are feeling the effect of cuts.

These and other big question marks will hang on British assets for a while to come - even if investors today are giving us the benefit of a lot of doubt.

Update, 15:05: David Cameron's statement rather underscores what I was saying earlier - there are some important areas of agreement between him and the Liberal Democrats on the subject of the deficit.

As predicted, he's reminded Mr Clegg that they both agree on Labour's so-called "jobs tax". And he is willing to give ground on tax cuts for lower paid.

Others will pore over the political implications of what Mr Cameron has said. I doubt Mr Clegg will think an all-party committee on political reform is a good substitute for a referendum.

But note the mood music: as Mr Cameron said many times, this is a time where urgent things need to be done, and the British economy needs stability at the top. Subtitle: this is not a time to put Britain's political stability at risk over your own self-interest in electoral reform.

He said that the Conservatives had not changed their mind on cutting spending this year - but note there were no numbers involved. As I said earlier, the gap between zero spending cuts this year and net cuts of £6bn would surely not be too hard to bridge.

Even if it is not - remember spending cuts don't need a formal Parliamentary vote, only tax rises. That distinction is not lost on George Osborne.

The markets may well like the sound of Mr Cameron's offer - investors want him to find a stable working arrangement for government almost as much as he does himself. They and we will wait to see how it goes down with Nick Clegg.

Comments

Page 1 of 3

  • Comment number 1.

    Stephanie

    It is good to start outlining the lines of a potential deal between the different parties that could form the government. I really think that as well as the Civil Servants that have been made available to the leaders in the Cabinet Office, the experts from the IFS and probably NIESR should be available to them too. It will be important that any proposals made jointly should be able to command the support of markets afterwards.

    I cannot help but feel that if a more in depth discussion of the details of he necessary tax rises and spending cuts had been finessed from the politicians before the poll, they would not be trying to put together an emergency budget in time for the Queens Speech, when they are all shattered after a tough election campaign. Crunching important numbers when you are exhausted does not make for getting the sums right. Now more than ever we need to get the sums right.

    As well as the spending cuts for the current year, the sticking points may also include Tory inheritance tax and the alternative "fairness proposals". Equally, the Liberal Democrat's £10K income tax threshold proposal may be tricky to negotiate.

    Thanks for kicking off the discussion.

  • Comment number 2.

    What a mess at such a time!
    As I understand the situation (as the uncumbent PM) has the right to try to form a Government first.
    If Brown tries to maintain his premiership, he would have to go to the House of Commons to see if his government could survive a motion of confidence. My gut reaction is that this would noit happen till the state opening of Parliament and Queen's Speech on May 25.
    If Brown could not form a government or did not survive the motion of confidence, he would be expected to resign.
    Queen Elizabeth would likely ask David Cameron to try to form a government. This Conservative Government would be a minority or coalition administration.
    If no government can command the confidence of the House of Commons, parliament can be dissolved and another election held. (How exciting!)
    One party governing as a minority government is a more likely scenario than a coalition government, but oh what a political headache each and every day trying to get government business done!
    While you’re waiting and seeing who will lead the country, maybe Brits should be examining election reform so that it’s much harder for this type of scenario to occur and so that more votes truly matter. Right now, parties can win a majority of votes, but not elect in a single seat.
    Anyway, what a time for this mess to happen, or maybe the uncertainty and the deficit and the expected cuts made this occurence inevitable.
    The times themselves are uncertain...

  • Comment number 3.

    Based on the assumption that government spending in this tax year could be over £150 billion higher than tax receipts.

    They can;

    1) Severely cut public expenditure, which means both public and private sector job losses, but then we’re well into this tax year and there is insufficient time to implement such cuts effectively.

    2) Try and borrow it by issuing gilts without B.O.E. support, but evidence suggests there probably isn’t the demand for £150 billion of them, and even if there was, the UK would end up in a compound debt trap.

    3) Substantially increase taxation, but then most would spend less in the private sector to compensate for it and the UK would fall into a compound tax spiral once the tax rate passes 50% of GDP, with more private sector job losses.

    4) Get The BOE to print another £175 billion to fund the Government through the rest of the tax year, and redeem any expiring gilts.


    Dear Mr King,

    Please could you print some more money, so we don’t have to face reality just yet.

    Love David & Nick.

  • Comment number 4.

    In wait and see mode, Stephanie?

    Sounds more like running around like headless chickens, trying to pick up as much as possible in the feeding frenzy while not losing any more appendages. Meanwhile we, as turkeys, have voted enthusiastically for Christmas.

    Brave post before our markets close and Wall Street opens.

    Whatever happens in Westminster, they need to be doing it with one eye on Greece & the EU and half an eye on Thailand.

  • Comment number 5.

    The markets always jitter when there is uncertainty, as opposed to comfortably quantifiable risk.

    They can safely be ignored for the next few days while the parties get their collective act together. If they fail to do this, then the markets and electorate alike will be extremely unforgiving.

  • Comment number 6.

    Time for deals to be done in smoke filled back rooms. Sorry no smoke indoors these days.
    As long as the deals mean the country will be better off, more secure and just that bit happier I am all for this situation.
    As as the markets have really shown, they don't like it straight away but it is a more secure place to be in I reckon.

    WIlling to be proven right or wrong, and I have a vote still for next time which might not be too long away

  • Comment number 7.

    I also intended to observe that £3bn cuts is really neither here nor there in the size of our GDP, state spend and PSBR. Covered by contingencies or error margins in the big spending departments. Would it have any effect? Would the thinking electorate and thinking markets fall for that? Would it have to be followed by sucessive cuts of similar and greater sizes?

  • Comment number 8.

    Yes we need a strong government but lets get real. Brown= strong? Do we really want to continue to dither? So instead of addressing the economy we 'negotiate electoral reform'? Priorities? Labour show their desperation to stay in power. Did they address this electoral issue in 13 years or did they govern with a minority mandate for 13 years? They also created 2 additional talking shops to protect their labour interests: Wales and Scotland. And they created another problem: Scots & Welsh MPs continue to vote on English issues. Then we also have the issue of constituency size. In a way a Lib Lab pact would probably work against Labour in the long run. It will certainly put the UK in a worse position in the short term.

    I guess you get what you vote for.

  • Comment number 9.

    Politics, the dirtiest game of them all they say.
    Lets see?

  • Comment number 10.

    GB did not show any form of leadership in his public address. "He was waiting for the outcome of talks between DC and NC". This plainly means that he is not taking the initiative or leading as the incumbent prime minister and should go.

    Should the Labour party somehow form the next government initially with GB as the leader and then subsequently change their leader, we should have a general election within 6 months so that new leader can claim a mandate or not, rather than soldier on causing mayhem with the markets and money purchase pensions.

  • Comment number 11.

    It seems the markets have given up the 'wait and see' policy and have gone for the 'panic button' as the FTSE seems to be going into it's recently 'usual' 3pm slide...

    How are the BBC going to spin this away?

  • Comment number 12.

    Where are all the Capitalists???

    Funny how they all go quiet when the markets are
    f
    a
    l
    l
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    n
    g
    .
    .
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    .

    They must be busy losing their shirts. Where are all the kiddie traders who blabber on about how the market 'works' without having a clue about the underlying inconsistencies?

    When the light comes on - the roaches all scatter for cover...

  • Comment number 13.

    Is this what 'recovery' looks like? - how many people are getting deja-vu?

    Shanghai 2,688.38 -51.32 (-1.87%)
    S&P 500 1,105.34 -22.81 (-2.02%)
    Nikkei 225 10,364.59 -331.10 (-3.10%)
    Hang Seng Index 19,920.29 -213.12 (-1.06%)
    TSEC 7,567.10 -12.38 (-0.16%)
    CAC 40 3,383.11 -173.00 (-4.86%)
    S&P TSX 11,589.59 -252.84 (-2.14%)
    S&P/ASX 200 4,480.70 -92.50 (-2.02%)
    BSE Sensex 16,769.11 -218.42 (-1.29%)

  • Comment number 14.

    While the boys play power games I note that personal insolvencies are at an all time high, the enviroment is hardening for UK exporters, taxes likely to rise, working life to be extended and public sector costs to be squeezed.

    Not wanting to get you into economic theory and away from the days events but is it worth considering if we are in the C wave socio-economic scene? Not sure if all the indicators are positive to this or even all the consequences of being in such a trend, but what is your view and the type of leadership the country may require to steer a very difficult course?

  • Comment number 15.

    8. At 2:29pm on 07 May 2010, Blogpolice wrote:

    I did not vote Labour but come on. Who is still in No. 10 tonight? Who, as it terns out, ran the most effective and successful campaign of the three leaders? Who is sitting watching the Conservatives compromise themselves to oblivion? Watching the LDs agonise over the thing they have always wanted?

    Strong? I would say so. Canny? Indeed. A survivor. He will walk away much disliked but grudgingly admired by many. I am sure many think that Cameron or Clegg might do a better job but there is scant evidence right now.

    Politics is exactly about getting power and clinging to it. Or did you not watch and listen to Cameron this afternoon?

  • Comment number 16.

    The government bond market in the UK can be managed by the BoE. The risk is to the sterling exchange rate, but as you say Stephanie, there are not many currencies for the pound to fail against. In any case a further moderate drop in sterling rates would not necessarily be a disaster.

    The result of the election means that, because an early second election is likely, no government will dare to implement the cuts that the City has been urging. This is a good thing because to implement cuts in government borrowing, before the private sector credit is available to fill the gap, would cause a lot of pain for virtually no gain.

  • Comment number 17.

    "this is not a time to put Britain's political stability at risk over your own self-interest in electoral reform. "

    Surely there is just as much (if not more) self-interest in *not* pursuing electoral reform?

  • Comment number 18.

    'Like the rest of us, investors are in wait and see mode.'

    More incisive journalism from the BBC.

  • Comment number 19.

    Does the UK have any investors left? Apart from the Dragons Den mob?

    Who are these 'Investors' you talk about? Big city institutions who don't a monkeys about the UK' future what they invest in so long as they get a 'return'?

    Do you honestly think the average voter could care less about them? And vice versa?

    GC

  • Comment number 20.

    The election will require a more balanced approach to dealing with the issues at hand. When the dust has setttled and the talks begin the compromises will take place with those decisions reflecting the concerns of those inside and outside of government. Banks and rating agencies have their own agenda and I would not pay a lot of attention to what they say as they tend to mix their political agendas with financial projections. They are proven dishonest and that should always be remembered. There may not be any good decisions to be made, the decisions will realy be about fairness and some association of the pain to the cause and the ability to pay..

  • Comment number 21.

    Germany may be in for an interesting time with their elections coming up.
    The voters are not happy with the Greek bailout. How will their elections effect the euro? Perhaps it wont be so bad if we all sink together. At least the Americans are swimming in oil! Heads up and deep breaths folks. http://news.bbc.co.uk/1/hi/world/europe/8667836.stm

  • Comment number 22.

    Call in the IMF and then they can blame Labour for the debt and the IMF for the cuts. Bingo problem solved.

  • Comment number 23.


    Then investors are dumb. They really think we cannot solve the deficit ???

    Look back in time - the political classes in this country have one of the best track records in the developed world for shafting its middle classes.

    We've been professionally robbed ever since the bail outs were announced - without so much as a whimper from us. Governments lead by Etonian millionaires will quite happily throttle the electorate once they have their hands on power - their track record speaks for itself.

    So whats the problem ?

  • Comment number 24.

    When would Cameron be allowed to call the IMF in for an audit of the books? Does that have to wait until a minority government is formed?

  • Comment number 25.

    Referring to Edwin above who states:

    -----
    'Like the rest of us, investors are in wait and see mode.'

    More incisive journalism from the BBC.
    ------

    These journos really are damned if they do and damned if they don't. What do you want them to do? Make things up? This truly is a waiting game and so far so good in my book. As all relationship counsellors would say "communication is key" and this has so far been clear and transparent.

    Getting bored with the wait? Try a sudoku perhaps...or maybe a good book.

  • Comment number 26.

    #16 stanblogger. Oh Stan say it aint so. Where do you think this private sector credit availability is going to appear from?

    The suppliers of private sector credit (banks) are systemically insolvent. That is why banks were bailed out and why toxic assets were transferred to the taxpayer. These assets are so toxic that they are now triggering sovereign debt crises. Do you not read the news? or do you passsively accept the lie that it is all the fault of lazy dissembling Greeks?

    Systemically insolvent entities cannot supply meaningful credit. It is simple.

    Don´t let the BBC confuse you. Sure the GBP will have trouble demonstrating that it is weaker than other fiat currencies, but this is only because we are entering a period of fiat currency destruction. Is that going to be a good thing? Look at the GBP against commodities and precious metals - you will find it is falling substantially. On a net net basis the UK imports commodities - so how does causing the GBP to crash against commodities help anyone?

  • Comment number 27.

    It is unrealistic to expect any coalition to last very long between Tories and Liberals. We seem to thing that the leaders speak for all of the party this is wrong. The Tories are on the far right (in parts) and the Liberals on the far left (in parts). I don't think a Lib/Con coalition will work.

    Now, a Con/Lab coalition might work far better - both parties are quite similar in actions (if not rhetoric) and between them they can run a coalition that could sustain quite a number of internal disputes and still survive. Whereas a Lib/Con coalition could not sustain itself in similar circumstances.

    Perhaps we need both Brown (and Cameron) to step aside and let the parties negotiate a Con/Lab coalition. I am personally not bothered about the personalities so long as policy is right for the economy, but I do see that stability is very important and unless we have a Con/Lab coalition I don't see us getting any form of stability - particularly when difficult and painful economic decisions have to be made.

  • Comment number 28.

    #2. BluesBerry wrote:

    "What a mess at such a time!"

    Why have you not listed in your options a National Government formed from all parties at the request of the Queen - one of he predecessors did this in the 30s I believe during that depression for the sake of the Nation's financial stability and subsequent recovery.

  • Comment number 29.

    Watching the UK election from France far more exciting than French elections!), I heard one commentator describe the UK as, perhaps, the next Greece.

    If so, maybe a few tips from the former Argentine Finance Minister might be worth considering. In a vox;eu contribution "Greece, Portugal and Spain: lessons from Argentina", Domingo Cavallo & Joaquin Cottani set out four lessons to be drawn from the Argentinean crisis:
    - devaluation and:or exit (from the Euro, in Greece's case) is not the answer;
    - an orderly restructuring of sovereign debt involving a 'Brady Plan' NOW is preferable to a disorderly one later;
    - fiscal consolidation is a must, which includes
    - fiscal consolidation that improves external competitiveness;
    - these last three must take place simultaneously.

    So, for the UK - no printing money; big tax reforms; but debt restructuring could come later, given that most short-term debt appears to be well covered? Certainly, from what I've heard of the Conservative and LibDem agenda, they appear to be agreed on the tax reform bit.

  • Comment number 30.

    Squarepeg 15

    ' Who, as it terns out, ran the most effective and successful campaign of the three leaders?'

    Well obviously not Labour. Their whole campaign was one prolonged car crash. The Conservatives would have won a comfortable outright majority were it not for the constituency boundaries being drawn so heavily in Labour's favour.

  • Comment number 31.

    12. At 3:50pm on 07 May 2010, writingsonthewall wrote:
    Where are all the Capitalists???

    Funny how they all go quiet when the markets are
    f
    a
    l
    l
    i
    n
    g
    .
    .
    .
    .

    They must be busy losing their shirts. Actually we are all shorting sterling and making aa killling!

    Only joking before you start I am not involved in financial services in any way - although I do trade fx as a hobby. You will be pleased to know I closed a short position on GBPUSD (for a very small profit) before the falls of the last couple of days missing out on a fairly hefty sum.

  • Comment number 32.

    The answer is simple, and I think Frau Merkel might be starting to wake up to the idea: nationalise/regulate the banks, write down debt.

    Look for example at KBC NV. It is a major institution based in Belgium, owning several banks and financial institutions round the world. After it's competitor Fortis went bust and became consumed by BNP Paribas from France, KBC got a bailout of about 7billion EUR from the Belgian state, with the hesitating approval of the EU commission. The conditions were that KBC would have to sell off assets to repay the debt and would not be permitted to use that bailout cash to unfair competition.

    KBC's daughter companies hold undisclosed but large amounts of Greek bonds. KBC's plans to sell off child units, or IPO some of the child units, are now compromised and it will probably not be able to raise the capital to meet its obligations.

    If Greece defaults, which it will, then it will definitely not be able to meet its obligations, and this same story goes for many banks around the EU.

    The banks are now essentially nationalised or part nationalised and struggling to raise capital, with the EU commission breathing down their necks ready to seize them and hack them apart if they can't meet their debt obligations.

    Now, followers of this blog know full well that capital just isn't going to get raised. Nobody is going to be mad enough to throw their current account surpluses at a failing social framework.

    The end result, like it or not, is going to be nationalised, state regulated banks, and there will be direct, commanded alterations to the economy.

  • Comment number 33.

    #31
    "You will be pleased to know I closed a short position on GBPUSD (for a very small profit) before the falls of the last couple of days missing out on a fairly hefty sum. "

    I learned the hard way. Close down loss positions quickly. Profits let ride (just lock in the gain with stops).


  • Comment number 34.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 35.

    Some say that the constituency boundaries give Labour an advantage so I decided to check the figures. On the percentage of the actual vote, the Tories should have won 234 seats, Labour should have won 188 seats and the Lib Dems should have won 126 seats. This shows how unfair our system is in its bias to the two big parties.

  • Comment number 36.

    This is a fascinating scenario. The electorate have voted in a completely rational way out of self interest, with inner cities, Wales and Scotland, siding with the party who, despite taking our nation to the brink of bankruptcy, provide their way of life through the welfare state. This largesse of course cannot be sustained, so it is a case of live now pay later - the mantra of New Labour.

    The markets are trying to correct the overvaluation of assets, created by the governments interference in the market, and the government will try, as it always does, to keep the bubble going.

    The scene is set for the headline act. Prepare yourself for currency devaluation.

  • Comment number 37.

    #32
    "The banks are now essentially nationalised or part nationalised and struggling to raise capital, with the EU commission breathing down their necks ready to seize them and hack them apart if they can't meet their debt obligations.


    This should have happened here. Nationalise and control and make them serve commerce. Instead we just propped them up, effectively giving in to blackmail and moral hazard and maintaining the old bonus culture. Of the three approaches, 'nationalise', 'prop up', 'let the markets sort it', propping up the banks was the worst option.

    The German's will sort this mess out in Europe for the simple reason that they have the most to lose, namely their world beating export machine. Why do you think they have a relatively small banking sector, because they lack banking talent or because they have a precise view of banking as a handmaiden to something bigger and better.

    Don't underestimate Merkel.



  • Comment number 38.

    Here we all go again, proposing solutions to the impossible question. It's a bit like the brilliant piece of absurdity in The Hitchhikers Guide to the Galaxy, "The Answer to Life The Universe and Everything is - 42." Come on don't you get it yet, we're doomed, whatever course of action we take we're on the butchers slab waiting for the cleaver to fall.

    Unless someone thinks way out of the box and comes up with something radical and NEW you can pontificate, postulate and prevaricate all you like, we're dead meat.


    fere libenter homines id quod volunt credunt

  • Comment number 39.

    Stephanie, have every confidence in your opinions on the financial world, something i know very little of, but I do know human nature. Whether Cameron decides to keep in with his new pals and go for 3 billion of cuts rather than 6 billion, the big, big issue for the Lib Dem Party will be on whom those cuts will fall. The people like Ashcroft who have bankrolled Cameron's ambitions, and the newspapers that have supported the Tories are, let's face it further right than any in Clegg's Party. Clegg will, in my view, have one hell of a problem to distinguish right wing ideology from what is truly in the national interest when those in the Tory Press and the many TV pundits express their bias views so force-ably. It would take a man with a far stronger personality than Nick Clegg

  • Comment number 40.

    "The leading ratings agencies have all come out saying the election result will not change their immediate view of the UK - or threaten its AAA credit rating anytime soon."


    Who rates the rating agencies.

    Do they have an agenda. Are they 'arms length'.

    A job for The Markel.

    Well, we hav'nt got anyone.

  • Comment number 41.

    33 RD

    I learned the hard way. Close down loss positions quickly. Profits let ride (just lock in the gain with stops).

    Haven't we all!

    Sell in May and stay away was bad advice in 2009 but could turn out to be the right call in 2010.

    Anyway hope you are not too glum about a Con-Lib coalition.

  • Comment number 42.

    " On the percentage of the actual vote, the Tories should have won 234 seats, Labour should have won 188 seats and the Lib Dems should have won 126 seats. This shows how unfair our system is in its bias to the two big parties."

    What - no vacant seats for the 34.9% of the registered voters who didn't bother to trouble the polling stations at all.

    When you think about it it isn't much of a mandate for Tory rule is it, 36.1% of a turnout of 65.1%. In other words 23 people out of every 100 registered voters opted for Blue rule. Damn sight worse for the rest of them.

  • Comment number 43.

    #41
    "Anyway hope you are not too glum about a Con-Lib coalition"


    If it happens it will justify my not voting LibDem.

    I will be amazed if it happens. Clegg's party will go ballistic. The sticking point will be Europe though Cameron could see sense and dump his bed-fellows and join Merkel and Sarkozy; he can do this and still be a Eurosceptic. LibDems and Conservatives can fudge PR.

    Clegg should support Labour on a strict package that includes

    PR
    Brown resigning within 3 months
    A detail costed package put in place to sort the deficit.

    Alternatively, my preferred option, LibDems should do nothing and vote on a bill by bill basis.

    There will be another election this year.

  • Comment number 44.

    42. At 8:22pm on 07 May 2010, NorthSeaHalibut wrote:
    " On the percentage of the actual vote, the Tories should have won 234 seats, Labour should have won 188 seats and the Lib Dems should have won 126 seats. This shows how unfair our system is in its bias to the two big parties."

    Out of interest based on share of the vote BNP would get 12 seats - food for thought.....

    What - no vacant seats for the 34.9% of the registered voters who didn't bother to trouble the polling stations at all.

    Good job they didn't - there were enough problems as it is with lack of ballot papers/staff and time. That said if you don't vote then you don't count so the percentages stand as is - of those eligible and willing to vote!

  • Comment number 45.

    >>Subtitle: this is not a time to put Britain's political stability at risk over your own self-interest in electoral reform.

    This puts Nick Clegg in a cleft stick !! If he pushed hard for proportional representation and derails any economic solution, then he's the bad cop to the voters. If he fails to do so, then he's the bad cop to his party supporters !!

  • Comment number 46.

    43

    I will be amazed if it happens. Clegg's party will go ballistic.

    We'll see - the lure of power.....must be tempting....

    High stakes for both Clegg & Cameron - they will need to watch their backs as much as each other.

    A weak Lib/Lab coalition which fails to tackle the deficit could find itself in a double dip sitution calling an election before PR is in handing a majority to the Tories.

  • Comment number 47.

    #10 >>This plainly means that he is not taking the initiative or leading as the incumbent prime minister and should go.

    I believe that there was some mention that the Lib-Dems will not work with Labour so long as he is in charge !! That rather cuts down his options to "take the initiative" !!

  • Comment number 48.

    Be prepared for the storm, the Pound will be sold off next week no matter who forms the next Government in the UK.

  • Comment number 49.

    #12 Or could it be that they have factored it all in and are sitting in the sidelines waiting to see if/when it's worth their while to come back into the market again ??

    Perhaps it's just the gamblers who are willing to make risky punts that are still in the markets trying to make quick gains !! After all, the best time for gamblers is when the volatility is high !!

  • Comment number 50.

    #2 BluesBerry

    with PR this type of scenario would happen after every election......

    .... or you end up with ridiculous semi-coalition parties that stand with seperate agendas to gather as many votes as possible. But fully intend to govern on a prearranged deal

    PR is not Infallible, the voter is still manipulated

  • Comment number 51.

    As usual fair bit of hogwash and distorted lens comment.

    Both Cameron and Clegg know that the 'best near term solution' to satisfy the markets is to thrash out some form of agreement (for as long a fixed term as possible) primarily on the economic issues and the financial situation which is grave. It's in both their and the country's interests.

    Markets are waiting....until Monday I suspect.

    Either way, Labour is dead in the water and Brown is dead man walking. The market pressure will become unbearable with any other scenario (in terms of the fact that things like interest rates will go up immediately - having an immediate impact on individuals).

    Very interesting to see how the markets were reacting last night to the voting as I have previously predicted. Labour win had been discounted. Hung meant downward pressure on sterling and upward pressure on gilt yields. Tory majority the reverse. The 'Opik' moment provided clear evidence.

    ConLib pact - bearable for stabilisation purposes in the short term that may get extended with the right decisions which will include cuts for those still hoping in delusion that it won't be the case......we are currently on borrowed time thanks to a very small percentage of the electorate who voted in self-interest.........

  • Comment number 52.

    #15 >>Politics is exactly about getting power and clinging to it.

    There are precedences for this !! Didn't a certain A. Hitler try to cling on to power until the Russians nearly reached his bunker ??

  • Comment number 53.

    #42 NSH

    It's called democracy and its the way the maths work......

  • Comment number 54.

    WOTW

    My team and I have been busy analysing the implications of the result and how it effects our business environment and our business. We'd already factored in the initial 'market reaction' (correctly) see #51 above.

    Sorry couldn't comment earlier but that's the day job for you.....

  • Comment number 55.

    #22 >>Call in the IMF and then they can blame Labour for the debt and the IMF for the cuts. Bingo problem solved.

    That's what they did in Greece !!

  • Comment number 56.

    Clegg must go with whoever will give him PR.
    This may hurt in the short term (especially if it means propping-up Brown) but the benefits for his party will be realised in a maximum of 5 years - it's a no brainer.

  • Comment number 57.

    #44 "Good job they didn't - there were enough problems as it is with lack of ballot papers/staff and time. That said if you don't vote then you don't count so the percentages stand as is - of those eligible and willing to vote!"

    I wasn't being serious about proportionally allocated empty seats for the "Can't be bothered's" it was my pathetic way of pointing out that nearly as many people couldn't be ar**d to get off their sofa's and vote as voted Tory.

  • Comment number 58.

    #52
    "There are precedences for this !! Didn't a certain A. Hitler try to cling on to power until the Russians nearly reached his bunker ??"



    According to some of Cameron's wacko eastern European EU allies (Clegg please note) AH is still alive and hiding in his bunker and they celebrate his birthday.

  • Comment number 59.

    #53. At 9:16pm on 07 May 2010, Rugbyprof wrote:

    #42 NSH

    It's called democracy and its the way the maths work......

    ----------------------------------------------------------------

    Maths - Agreed, I do maths, that bit I follow.

    Democracy - Naah! It's not really is it, it's just the way we do it, it's not democracy in the true sense we just like to kid ourselves it is.

    I think some of you are taking me far too seriously, I'm waiting for the workers revolution, the election is the comedy warm up act before the main event coming to a street near you.

  • Comment number 60.

    57. At 9:27pm on 07 May 2010, NorthSeaHalibut wrote:
    #44 "Good job they didn't - there were enough problems as it is with lack of ballot papers/staff and time. That said if you don't vote then you don't count so the percentages stand as is - of those eligible and willing to vote!"

    I wasn't being serious about proportionally allocated empty seats for the "Can't be bothered's" it was my pathetic way of pointing out that nearly as many people couldn't be ar**d to get off their sofa's and vote as voted Tory.


    It's okay I understood 'can't be bothered' party - popular as ever.

  • Comment number 61.

    #58 >>According to some of Cameron's wacko eastern European EU allies (Clegg please note) AH is still alive and hiding in his bunker and they celebrate his birthday.

    No, he's not !! He was last seen taking tea with Elvis on the moon !!

  • Comment number 62.

    "Markets are waiting....until Monday I suspect."

    Ahem - they don't open at weekends.

    "....very small percentage of the electorate who voted in self-interest."

    I would have thought a very large proportion of the electorate roughly equivalent to...well...all of them voted in self interest. Isn't that the idea?

  • Comment number 63.

    Clegg, PR and the Economy

    If Clegg goes with any party that does not DELIVER PR his party and the country will not forgive him and will condemn him and his party at next year's general election to oblivion. The Tory offer of a referendum, with them campaigning for 'NO' is completely unacceptable.

    Clegg must also insist that the Tories in Europe rejoin the mainstream right of centre group.

    Basically he must insist that the more 'strange' policies in the Tory back-pack are expunged or abandoned for the duration.

    Why must he do this? - because if he doesn't it will the the economy and the Nation that will suffer irreparable damage.

    I don't think the Tories can or will agree and so Clegg can't either. (Similar problems will be faced with a Lag/Lib pact.)

    We need a National Government comprising Tory, Labour and LibDem ministers - that is the only way that can work, it seems to me at present. The is all about Economics. We have to tackle the deficit (both public and private) This will be an age of austerity and very painful for the over indebted, but this is inevitable and just a result of arithmetic. But we cannot get out of this hole unless we have almost unanimity in Government and this will not work with unstable pacts for the decade or more of concerted effort it will take. Only a National Government of all parties can work.

    The 'economic enemy' is so powerful that nothing less extreme will save us.

  • Comment number 64.

    #42. At 8:22pm on 07 May 2010, NorthSeaHalibut wrote:
    "When you think about it it isn't much of a mandate for Tory rule is it, 36.1% of a turnout of 65.1%. In other words 23 people out of every 100 registered voters opted for Blue rule. Damn sight worse for the rest of them."
    Fair point. But as you are probably aware, the UK has consisently been governed by parties which gain well below 50 people out of every 100 registered voters.
    The non-voters is another issue; however, if you stick with the percentages who actually did vote, the usual situation is to end up with governments which have a majority of people voting for other parties.
    This is surely why it is time to throw out the anachronistic 'first past the post system' and introduce a proportional representation system of voting (of which there is more than one variety).
    Of course we might well end up with coalition government, but surely it would be better to have a coalition which represented a majority of the voters, rather than this bizare system. Sceptics like Dave Cameron and Boris argue that one would lose strong government; what they actually mean is that the Conservatives would probably lose the chance to govern without a coalition and that loss of potential power irkes them. As for Brown now embracing the concept of electoral reform, it is laughable. Apart from a few Labour ministers like the late Robin Cooke, none of them had the integrity to follow Blair's implied promise of electoral reform. Labour have had 13 years of missed opportunity to call a referendum on electoral reform; but like the conservatives, whilst they held the reins of power, they would not pursue the idea. Now they are staring into the abyss, they are only too happy to oblige. That is why Brown and Cameron are merely opposite sides of the same tired old policies and neither should be given the right to govern this country.


  • Comment number 65.

    Today the public service debt each full time private sector worker has to cover is £165,000, add that to the mortgage and current taxes. Then throw in a few more percentage points on interest........

    My wife and I can't cover our share. We just don't have it.

  • Comment number 66.


    20. At 5:33pm on 07 May 2010, ghostofsichuan - seconded!

    A £50 fine for not comming to the poll station would do us plenty of good. - all the poor would vote, one of few rights they can enjoy, most of the rich would vote too (they do anyway, but they would be forced to exercise their options to the full). The campaign will be addressed to a wider public (our PR specialist would need full retraining after proportional representation and aforementioned fine came into force). Turnout can be estimated at 90% (Belgium)hence fines ca. £40 mln would cover much of the cost of the elections. And please do note a "blank vote" or an "against all" vote wouldn't be fined!
    As for the markets, I'm not a surfer, and playing them looks like an ability to ride both slopes of the wave. If we have such a big advantage in this field, and so much of top talent stimulated by top reward shouldn't we expect only good from the turbulence around?

  • Comment number 67.

    #61
    "No, he's not !! He was last seen taking tea with Elvis on the moon !!"



    Impossible. Elvis runs my local fish 'n chip.

  • Comment number 68.

    Watch the pound fall and burn, while the Squatter awaits the lib's in number Ten.

  • Comment number 69.

    #63
    "I don't think the Tories can or will agree and so Clegg can't either. (Similar problems will be faced with a Lag/Lib pact.)"



    Brown should go it alone or resign, in which case Cameron will go it alone.

    LibDems should stand on side lines and sponser a PR bill.

    The log jam will not unblock until Brown leaves the stage. Labour can no longer delay a change of leader.

    BTW. PR exists in 27 out of 30 European countries.

    It does not exist in Greece or the UK. Both Greece and UK have the two biggest deficits in the EU. Connection ??. Head strong leaders ruling unchecked.

    Another election this year is a given.


  • Comment number 70.

    I want to see 3 things tory and lib agree on ASAP:

    1. Reduction of debt.
    2. Jobs for British people.
    3. More high end education for British people, so they can get the important jobs (doctors & engineers)

    Hopefully Vince will be part of this, because if Osborne decides on anything we are all doomed!

    All this scaremongering of the pound and FTSE. Forget it. I'm happy to eat local food and go on holiday in the UK...

  • Comment number 71.

    "The leading rating agencies have all come out ... etc etc" . This is totally pathetic ! Have the (discredited and corrupt) rating agencies replaced the voters and the politicians ? Why don't you suggest that their management start governing Britain ? Call it whatever you like , but from the moment the ratings agencies (and their pals the vulture hedge funds) impose their will on how this country must be governed , DEMOCRACY IS DEAD HERE ! RIP ! You are paid by the taxpayer Ms Flanders not by Moody's or S&P and don't you forget that . Unless THEY are your real (pay)masters .

  • Comment number 72.

    Simon H

    1) Reduction of debt - how would you achieve this?
    2) Jobs for British people - how do you envisage this could happen through government?

    The strength of the pound is very important - we import a lot of food and energy. We cannot "forget it".

  • Comment number 73.

    Some folk have been talking recently about moving the UK General Elections to weekends. Right now I am incredibly grateful that we haven't done that. A weekend with markets closed may just provide enough time to get something settled. Not too keen on all the deals being done by people in the Parties who must dead dog tired, though.

    If the fog, mist and cigar smoke hasn't cleared by Sunday evening, next week could be interesting ... and bumpy.

  • Comment number 74.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 75.

    70#

    (3)There has never been more people in higher education, at the moment here in the UK there is a glut of Professional highly skilled people available, I know trainee Doctors and Teachers who can not get a position.
    ( everyone can not be a Doctor etc )

    We also need wealth creators in the UK to pay for the NHS.

    (2) While we remain in EU Impossible

    (1) Possible (but painfull)

    Our population has more than doubled from the Dig for Victory days of the 2 World War, most of our food and oil/gas is imported from around the world today, we pay for it in $ etc

    Meanwhile the pound falls

    Holiday at home very wise the volcano clouds will be back
    we are all Doomed

  • Comment number 76.

    Sorry guys, im new to commenting on the bbc today, im 20 by the way, for last few months ive been pondering adulthood and the choices i have to make in life. what i was questioning myself most on was who i would vote for given the chance there was someone useful to vote for who would it be??? as far as i can see, on the collection of lies and bull**** i have read and watched in ruppert murdochs created world, is that we should all pick sides! sides?? i dont even know what these different sides want ?? do you really ? or is the fact that the media have poisoned you over the amount of years you have spent on this godforsaken planet have brainwashed you into thinking? I beleive that the side you should all pick is the side of your own not in the sense of selfishness but of the fact of self preservation if we split the world into borders counties, counrties, continents we break up what little chance we have at survival. if we were to all embrace diffrent cultures and diffrent ways of living the world would be at one, one piece in the greater picture what is the universe. we all believe our ways of doing things are the best this is wrong what about listening and actually taking on board another persons actual point of view without judging or mocking maybe we would be a bit more connected to our former selves. Peace out Joel

  • Comment number 77.

    #69 >>BTW. PR exists in 27 out of 30 European countries.

    And everyone of them are eyeballs-deep in debt !! Not that much of a recommendation, is it ??

    >>It does not exist in Greece or the UK. Both Greece and UK have the two biggest deficits in the EU. Connection ??. Head strong leaders ruling unchecked.

    It doesn't exist in much of the East either and most of them have reasonable growth and surpluses !! Connection ?? They went through the fire (The Asian Currency Crisis) and came out stronger and more resolved to have large National Reseerves to see off debts and, worse yet, the dreaded IMF Stormtroopers !!

    So PR is not the Panacea of All Ills !! Prudent financial management (where have I heard this before, I wonder ??) seems to be the Panacea of financial ills !! Remember Mr. Micawber's rather famous saying !!

  • Comment number 78.

    #72 >>1) Reduction of debt - how would you achieve this?

    Harry Potter's magic wand ??

    2) Jobs for British people - how do you envisage this could happen through government?

    Hermoine's magic wand ??

    The strength of the pound is very important - we import a lot of food and energy. We cannot "forget it".

    The entire Hogwort's magic wands combined ??

    Some people still there's magical solutions to our problems, you know !!

  • Comment number 79.

    #73 >>If the fog, mist and cigar smoke hasn't cleared by Sunday evening, next week could be interesting ... and bumpy.

    Not forgetting the knives in the back and the Ides of May !! He may not be in No. 10 for much longer, whatever deal may or may not be done !!

  • Comment number 80.

    Pity in a way that the macho leaders couldn't say what they would do if they didn't win a majority. I notice the chaos that Germany has endured with coalitions - except no party is ever present in these coaltions. Let's ask us if we want PR? Or is that something we can't understand? All we can vote on is Europe. Perhaps. 36% of the vote - 306 seats. 24% of the vote 57 seats. How anyone can claim 36% of the votes cast is a mandate amazes me. No more elections under this silly system, and let's have a Government reflecting over 50% of the votes cast. And if Lib/Lab/Con have to give up some of their pet projects that their hardliners want, then that's no bad thing

  • Comment number 81.

    Please to remember greeces problems are exacerbated by 1) fiddled figures when they joined the Euro - assisted by one of those big banking firms i think i remember reading and 2) widespread tax evasion.
    Here in the UK we don't have those sorts of problems.
    Please too remember that immigration from eastern europe will go down from 2011 as the delays imposed by such as germany on eastern european immigrants end. If the Conservatives in the 1990's hadn't been so keen on a wider rather than deeper europe the eastern europeans wouldn't have been able to come
    Please too remember that the EMPLOYERS take on the eastern europeans for lower wages.
    Will david cameron pledge to a 5 year term, rather than a snap election in the autumn before the hard measures bite?

  • Comment number 82.

    I am not sure that pretty much every european country with PR is in debt, or if they are, that the debt is a problem.
    These credit rating agencies? These are the ones that said the Banks debts, these dice and sliced mortgages were AAA rated (and were junk actually). How then are we so sure they are right now?

  • Comment number 83.

    Its the begining of the end of the first pass the bollard democracy as we know it [cheated every party out of its "divine right" this time] and the new begingin for the LibLabaConocracy

    Meanwhile back at the tranche the banksters master illoosionists will be breaking in next generation of trojan hores to gift wraaap to the tax payers points of entry, packing them tightly like Russian dolls ready to do the conga.

    Two of the menage a trois in a boat liblabaconocracy are trusting in quantum theory to allow the banksters hot dog sausage to be in two different places at the same time.

  • Comment number 84.

    82. At 02:10am on 08 May 2010, michellegrand wrote:
    I am not sure that pretty much every european country with PR is in debt, or if they are, that the debt is a problem.
    These credit rating agencies? These are the ones that said the Banks debts, these dice and sliced mortgages were AAA rated (and were junk actually). How then are we so sure they are right now?
    -------------------------------------------------------------


    It matters not weather the ratings agencies are right or wrong, we are relying on their "timber" to be able to wreckognise the dead wood from the dead trees.

    After all what has reality to do with the workings of master illoosionists , their big choppers and a shed full of firewood.

    The rating agencies "timber" is equivalent to canned laughter added to the sitcoms to promote the wisdom of the crowds.


  • Comment number 85.

    I am yet to hear any coherent argument against a National Government.

    It's time for all three leaders to sit down together and thrash it out in everyone's best interests. Even the "markets" would be tempted to react favourably. Set a time limit ~ three years of National Government and then an election. Isn't that what we voted for! And bring in people from outside politics to the Cabinet.

    In the election of 1931 the National Government won 556 seats a majority at that time of 500!

  • Comment number 86.

    #77
    "It doesn't exist in much of the East either and most of them have reasonable growth and surpluses !! Connection ?? They went through the fire (The Asian Currency Crisis) and came out stronger and more resolved to have large National Reseerves to see off debts and, worse yet, the dreaded IMF Stormtroopers !!"


    Don't get too carried away with the 'fabled East'.

    China is in serious 'bubble territory'
    Japan has debt 200% of GDP. Despite low interest payments on this debt it is still a massive chunk of GDP.
    China has a huge surplus held in what exactly - doodoo money, the dollar. They should buy Australian mining real estate, or just buy Australia period :)

    Fortunately the Japanese and Chinesse have a history of getting on famously, don't they :)
    What would happen if Taiwan cosied up to Japan; unlikely I know.

    As for debt please try and distinquish between debt and deficit. The whole world is crippled by debt but not every country in Europe has a sky high deficit. In Europe the worst offenders are UK and Greece who both have FPTP systems. German debt is high, deficit low, but supported by a massive export engine.

    UK debt has long maturities but this will not stop yields rocketing in the bond markets; this will push up interest rates which together with high unemployment (due to public sector cuts) will trash the housing market.

  • Comment number 87.

    #76

    You obviously did'nt spell bull**** right.

    Moderators very severe on spelling mistakes.

    :)

  • Comment number 88.

    http://news.bbc.co.uk/1/hi/business/10102642.stm

    And now a quick step down the slippery slope to the United States of Europe !!

  • Comment number 89.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 90.

    #80 >>And if Lib/Lab/Con have to give up some of their pet projects that their hardliners want, then that's no bad thing

    And remember a camel is a horse designed by committee !!

  • Comment number 91.

    #81 >>If the Conservatives in the 1990's hadn't been so keen on a wider rather than deeper europe the eastern europeans wouldn't have been able to come

    The first part of Eastern Europe to join the EU was East Germany under the reunification policy !! Hungary and Bohemia (Czechoslavia) can also be considered under the reunification of the Austro-Hungarian empire !! Poland came in under Lech Walensa and the Baltics sneaked in on their coat-tails !!

    Unfortunately, Britain does not have the right to choose who should or should not join the EU !! Britain can leave the EU in order to prevent the Eastern Europeans from crowding British soil but that also means that Brits have to get work or residence visas to work or live in any part of the EU and also have to go through tedious immigration routines everywhere they go !!

  • Comment number 92.

    12. At 3:50pm on 07 May 2010, writingsonthewall wrote:

    "Where are all the Capitalists???"

    Pretty much anyone with a private pension is a capitalist, so they're all over the country.

    "Funny how they all go quiet when the markets are
    f
    a
    l
    l
    i
    n
    g"

    Err - no. Capitalists don't believe that high prices are good. Capitalists believe that prices which buyers and sellers agree on are good. It's a little thing that we call freedom.

    It's those who want to have central control who like to have high share prices, because prosperity tends to lead to high share prices, so having high share prices can be spun as indicating that the nation is prospering, and therefore that the powers that be must be doing a splendid job.

    "Where are all the kiddie traders who blabber on about how the market 'works' without having a clue about the underlying inconsistencies?"

    What underlying inconsistencies are you thinking of? As far as I can see, when you have a fair market (one not constantly pumped up with QE and taxpayer subsidies of banks), then letting people buy and sell things as they see fit and as both parties agree to doesn't seem to be too big a problem.

  • Comment number 93.

    #85 >>In the election of 1931 the National Government won 556 seats a majority at that time of 500!

    There cannot be more members of the House of Commons than there are seats !! However, there can be cabinet members and other members of the government that are not from the Commons - one (in ??)famous recent example being Lord Teflon Mandy !!

  • Comment number 94.

    #90
    "And remember a camel is a horse designed by committee !!"


    Your point ?

    A camel is superbly efficient at coping with the harshest environments, though don't get down wind of one.

    Top marks to the committe that designed the camel.

  • Comment number 95.

    Away from my earlier comments about the potnetial ConLib pact another disturbing elephant in the room has appeared that nobody has yet openly commented.

    The issue of Scotland.

    It is now clear that without Scotland the Conservatives would have a clear majority to form a government in England and the UK.

    Results in UK excluding Scotland show Conservatives with over half the seats and no doubt an average of probably 40%+.

    In Scotland the Conservatives have ONE seat from c. 59 and voted, in marked contrast, for the staus quo. The situation has been brewing for some time but has now become very, very significant.

    I'm not sure how many people in England are going to continue with the Scots basically dictating how we govern ourselves down here whilst they continue to govern themselves whilst receiving increasing taxpayer funds.

    The real disgrace isn't the voting system but the machninations of the voting north of the border - but I guess nobody wants to go there.

    The issue is compounded when you think that the main miscreants and recipients of taxpayers money were north of the border - this situation could start to get a little ugly unless resolved.

    I have nothing against the Scots but their voting intentions are at great odds with England and Wales (NI is different in scale and representation). This is the real story of the election.........

  • Comment number 96.

    #95
    "It is now clear that without Scotland the Conservatives would have a clear majority to form a government in England and the UK."



    Three cheers for 'the elephant in the room'.

    Another election soon.

    I am sure the markets can wait 6 months :)

    Now where did I put my Bible on Shorting.

  • Comment number 97.

    #86 >>China is in serious 'bubble territory'

    They recognised the signs of incipient bubbles and took steps to squash them (if you'll excuse my unintended pun) !!

    >>China has a huge surplus held in what exactly - doodoo money, the dollar. They should buy Australian mining real estate, or just buy Australia period :)

    Out of China's reported surplus of more than $2 trillions-worth, less than $800 billion are in USD. They also tried to buy Aussie miners BHP and/or RioTinto but the Aussie government blocked those efforts for political reasons. So much for "LEVEL PLAYING FIELDS" !!

    >>Fortunately the Japanese and Chinesse have a history of getting on famously, don't they :)

    Yes, they do actually !! They've had a love-hate relationship for more that 2,500 years; so much so that the official written language of Japan, Kanji, is Classic Traditional Chinese !! Then again, there's a love-hate relationship between the Brits and the French and we have such good English words like "ambience" and "reservoir" and "Entente Cordiale" (or not so Cordiale, as the case may be) while they have good French words like "le weekend" and "le boyfriend" !!

    >>What would happen if Taiwan cosied up to Japan; unlikely I know.


    Taiwan was captured by the Japanese in 1874 and the locals were treated as 2nd or 3rd class citizens. Since then the locals have long memories and cosying up to Japan will happen only in absolutely dire straits !! They will also lose their cherished and much fought-over status as "Chinese", the raison d'etat (another good English term) of their quarrel with Mainland China, thereby losing their much-claimed mandate to rule China !!

    >>As for debt please try and distinquish between debt and deficit. The whole world is crippled by debt but not every country in Europe has a sky high deficit.

    Notice that I used the word "debt" instead of the word "deficit". Any country that is eyeballs-deep in *deficit* is a gone case !! A fine example will be Zimbabwe !! Those that are eyeballs-deep in debt may still be viable *if* they have a high enough income to deal with those debts comfortably, e.g. Japan !!

    >>In Europe the worst offenders are UK and Greece who both have FPTP systems.

    Singapore, being an ex-British colony, also has FPTP and they have just revalued their currency upwards !! China sets the post(s) where they like and their currency is under tremendous pressure to be revalued !! Bang goes the relationship between PR and low deficits !! As a matter of fact, China experienced its first ever *monthly* deficit in years but that is comfortably covered by their ginomous surplus !!

  • Comment number 98.

    #94 >>Top marks to the committe that designed the camel.

    But it still does not look and act like a horse !!

  • Comment number 99.

    More the 'ducks' in the room.

    A choice between a lame duck (Cameron) and a dead duck (Brown).

    Brown should present a Queens Speech with one item - electoral reform.

    Then he should implement electoral reform and resign.

    Another election in the late summer (Also no summer break for MPs)

  • Comment number 100.

    #97
    ">>In Europe the worst offenders are UK and Greece who both have FPTP systems."

    Singapore, being an ex-British colony, also has FPTP and they have just revalued their currency upwards !! China sets the post(s) where they like and their currency is under tremendous pressure to be revalued !! Bang goes the relationship between PR and low deficits !! As a matter of fact, China experienced its first ever *monthly* deficit in years but that is comfortably covered by their ginomous surplus !!"


    Singapore and China are not in Europe. Not yet anyway.

    In Europe the average deficit is 6.8% compared to the extremes of UK and Greece (c.13%). Very low deficits in Benelux and Germany.

    Relationship might well be coincidental but I would say more to do with consensus politics leading to steady consistent policies.

    I accept your very knowledgeable points in the rest of your post.

 

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