Whoever ‘wins’ some things will be more or less assured.
There will be ‘pressure from bond market’ about our debt. At least that is how it will be generally reported. In fact it will be something quite different. It will be pressure created on the bond market by investment banks and others speculating on the cost of insuring UK debt via CDS. They will speculate by buying CDS on UK debt, not because they have debt they are worried about, but because it is a great way of making profits.
We have seen it reap large rewards for speculators in Greece. It will occur here. To what degree and with what outcome I can’t say. But I do suspect insuring our debt will be ramped up, which will help propel the bond market towards demanding higher interest rates on our debt. The more the bond buyers have to spend on insuring the debt the more they need to get for buying that debt in the first place.
This will be reported as bond market concern about size of our debt and the worry that we either won’t have a strong – read draconian – plan of cuts or if we have, we won’t implement it or stick to it due to a weak or hung parliament.
The other term in the equation is growth. We either make cuts or we grow. Obviously every party prefers to preside over growth and announce policies for promoting it rather than being the party of cuts.
However, it is quite clear will not get sufficiently large nor rapid enough manufacturing growth to make a difference to our debt problems. The growth we will be told we have to go for is financial growth. The banks know this. They are already lobbying hard to say – all these much mooted ‘reforms’ and regulations – will have be stopped.
They will say – are saying – only we can save you. But you must let us. You must stop this silly talk of regulating. Already we are being ‘advised’ that forcing banks to hold more capital could cut 2-3% off GDP and severely hurt UK banks. Of course I quite see the utter madness, in the wake of the largest bank bust since the Great Depression, to suggest banks should hold a little more than a lucky clover leaf in front of their vulnerabilities! Silly Billy us.
The banks will tell whoever is elected that leverage is salvation, speculation is freedom and repayments of past bail outs should be quietly forgotten until ‘its safe to withdraw stimulus measures’. Which will NOT be any time soon.
Whoever is in power the spin from the banks will be that only they can save us. They will dress themselves in the garb of national treasures and saviours. At least in public. In private they will piss themselves laughing at us and pour pathetic political class. Vince Cable excepted.
No matter who wins policies will be dictated by the timetable of the markets. We will have to cut. Those cuts will have to be savagely deep and bring costs down over a maximum of three years but two would be far better. Taxes will have to go up. VAT and NI. Though employers would rather VAT.. This will have to be dome to bring cash in before the savings, even the rapid ones, come through.
Then there will be longer term savings. This means PENSIONS and retirement. ‘Reform’ of both is on its way like a runaway train. If you’re caught at the crossing they will have to identify you by your dental records. Pensions are an iceberg of unfunded promises that will be broken because they will have to be. I don’t like it. It will cripple me. but it’s going to happen no matter what I think.
Without real growth unemployment will stay high. This will further cripple any hope of a decent tax take. Benefits and unemployment will both get cut. Parties will differ on how hard to chop. But chop they will. With regret or without. I think that will be your choice.
Me, I want a hung parliament with a weak coalition for the same reasons as the bankers fear it. It will mean they are less likely to get what they want. I don’t want it to be too easy to push through wholesale ‘reforms’. Reform is perhaps the greatest entry in the Liars lexicon. I don’t want my country to be ‘reformed’ according to the desires and plans of the bankers who have screwed us.
'Me, I want a hung parliament with a weak coalition for the same reasons as the bankers fear it.'
I disagree. I reckon a weak coalition will make it easier to force the cuts through because it'll be Vince Cable doing it, someone the public trusts and is willing to give the benfit of the doubt.
Wheras George Osborne is simply too smarmy be able to make the same level of cuts without all manner of civil disobedience occuring…
Well that's a very good point. I suppose I had been thinking that a) Mr Cable might not be as captured by the current ideology as the others b) no matter who was the point man, without a majority it would be difficult to silence opposed voices c) The horse trading required at every step would make the whole thing unworkable.
This last point was illustrated for me last night, I think it was, when I heard how the Northern Irish MP's said they would form a coalition with Cameron IF he guaranteed to protect NI from any cuts.
That one achieves a perfect 10 from this judge for combining stupidity with parochialism.
But that said, I think your point has a frightening logic to it.