As the polls indicated that the gap between what was previously thought of as ‘Lost Labour’ and the ‘Conquering Conservatives’ has now narrowed to a cigarette paper, the markets have reacted to the possibility of a Labour led hung parliament.
The worry is that a hung parliament will not have the wherewithal to impose the cuts that are required on the country. The resultant inaction would then prove to be disastrous just when radical, unpopular and strong decisions need to be taken and followed through on in order to take on the 12% of GDP debt that we have.
The pound today fell to its lowest level against the dollar since May last year. It has also not fared well against the Euro.
What we have here is the markets telling us that we need to address the debt but many of the electorate would rather keep spending and maintain what they see as the status quo. I would liken it to the credit card junky who has overstepped the ability to repay but goes on regardless as ‘something will turn up’. That promotion or pay rise will be there in a few months time so they tell their bank manager that they’ll be alright then won’t they.
What many in the electorate don’t realise is that sovereign debt is tied closely to their future mortgage and debt rates. They also may not be conscious of the scale of local authorities now feeling the pinch and cutting back on jobs, this will very quickly spill over into central government and all the public service contract suppliers.
Far from showing a clear way ahead, Gordon Brown has managed to keep the truth of the dire straits we are in out of the gaze of the average voter. Or at least blind them to it with the assertion that we must not upset the applecart at the moment.
Also, why should the electorate listen to the markets? They’re just full of bankers and city types. They can be ignored as all they are after is their bonuses aren’t they?
It seems that, at the moment, Labour is managing to get a message across to the voters that it would be better for us all to sink or swim together, But under the Tories a lot of people will lose out for the benefit of (probably fewer, more well off) others. But what should really worry voters is what would Labour actually do if they retained power?