Tuesday, February 23, 2010

Hang on to your vote!

So the latest opinion polls are again pointing to a “hung” Parliament after the upcoming general election, with no single party able to form a majority government. In that event, say constitutional experts, the queen and her advisors could play a key role in deciding who is asked to form a government.

Yes, we are living in 2010 and the absolute power of monarchy was terminated in the English Revolution with the execution of Charles I for treason against his own people in 1649. But such is the nature of the compromise British constitution, the monarch still has residual powers as head of state. There is nothing written, for example, that says the largest single party in Parliament must be invited to form a government. New Labour could have fewer seats than the Tories but try to govern with the Liberal Democrats at the invitation of the queen.

The fact that an unelected figure, who inherited her power and position from her father (whose family has its origins in the German House of Saxe-Coburg and Gotha!) still has potential political influence in modern Britain just about says it all about the restricted nature of bourgeois democracy. But one suspects (as they say at Buck House) that another unelected group – the global hedge funds and the big wheels in the financial system – will have a more decisive role to play if the election results in stalemate.

That is because the British state is heading for bankruptcy as the recession deepens and the money markets want action sooner rather than later to sort things out. Every January since modern records began, tax receipts have been larger than government outgoings.Not this January, however. In January 2010, the Treasury had to borrow £4.3 billion – compared to a surplus of £5.3 billion last year and £14 billion the year before. All the signs are of a worsening position, as unemployment grows, consumer spending falls further and corporate profits decline.

The markets reacted to the January deficit by raising the interest rates it charges to lend to the British government, adding to the total debt which is probably running somewhere near £200 billion a year or close to 13% of the annual value of economic output. It’s more or less the same ratio in Greece which, as you know, is said to be bankrupt.

Back to the general election scenario. Jonathan Loynes, senior figure at Capital Economics research consultancy, was voicing something more than his own opinion in commenting on the deficit: "It is clear that a more credible plan to restore the public finances to health will be required shortly after the general election to keep the markets and rating agencies at bay."

The markets will not want a weak government cobbled together as a result of some horse-trading between the parties and blessed by the queen. You cannot, therefore, rule out the possibility that in the event of a deadlocked general election, the pressure will mount for an emergency national government of all the main parties in a grand coalition to deal with the country’s financial crisis.

And with a “return to growth” as likely as the discovery of weapons of mass destruction in Iraq, we know that will mean unparalleled, savage cuts in spending on public services, attacks on wages and pensions and more job losses. Opposition will be silenced in the “national interest”. Those who voted for one or other of the major parties will have been disenfranchised. You may ask yourself what the point is in participating in the general election under these conditions? And you would be right. Our votes are too precious to hand over to any of them in 2010.

Paul Feldman
Communications editor

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