So we got a hung Parliament after all, as predicted, and the first coalition Government since the Second World War. Who would have thought that we would have ended up with a Conservative/Liberal Democrat pact? The events of the past five days have been quite unprecedented with Nick Clegg very much the kingmaker. And what a kingmaker! After five days of talks, political U turns, he ends up with five LibDems in Cabinet and himself appointed Deputy Prime Minister. Definitely someone with political nous! So the parties that finished first and third will govern for the next five years while the runner-up Labour Party goes away to lick its wounds and appoint a new leader.
What can we make of all of this? Well, on first impressions, the Conservatives and Liberal Democrats seem to be making all the right noises. New Prime Minister, the youngest at 43 since 1812, David Cameron has talked of collective responsibility and difficult decisions ahead. No illusions there then!
The country has watched in mild bemusement at the comings and goings in Whitehall wondering first whether a Conservative/LibDem pact was possible, then working out all the consequences to the nation of a rainbow Government only to go back to square one and assimilate a Liberal Democrat coup in gaining a stronger foothold in Government.
As all parties agree, difficult times are ahead. A fixed term Government of five years is a sensible move, avoiding the potential short-term opportunism so favoured by the City. Government, of whatever hue, is in for a fixed long-term period, subject to Constitutional change.
Major appointments have been confirmed – George Osborne as Chancellor of the Exchequer, Teresa May as Home Secretary and William Hague as Foreign Secretary.
The first is most likely to impact our sector. The youngest Chancellor for 125 years has the toughest of all jobs on his hands. The City would have preferred more experienced hands at the wheel than an unproven 38-year-old. Ken Clarke’s name had been bandied around but he is Justice Secretary and Lord Chancellor. The nation’s financial favourite, who warned of the crash and produced a best-selling book on the financial crisis, Vince Cable, will have the remit of Business Secretary. At least he will be pushing hard for the banks to lend more, stimulating business in general. How the young Turk and wise owl will get on is anyone’s guess but subtle guidance behind the scenes can be no bad thing if only to keep things in check and on the right course.
What we do know from the formal coalition is that the new Government will proceed with the Conservatives planned public expenditure cuts of £6bn this tax year. Counter to the Liberal Democrats stance, and the Labour Party’s even stronger position on the matter, this move could risk jeopardizing the fragile recovery but the financial institutions are looking for tough moves now.
Chris Huhne is the new Climate Change and Environment Secretary, a welcome appointment as the Liberal Democrats demonstrated themselves greener than the Tories in their election manifesto. Climate change is a key issue for this country, this Government and our own sector. A continuation of the CO2 -based taxation regime is expected and worthy. And both parties are backing the high speed rail network link and an electric and plug-in hybrid national recharging network.
New Transport Secretary Philip Hammond needs to grasp the problem once and for all. We need Government to have a vision for the future. A fully integrated transport policy is the minimum we should expect.
For the moment, we have a ‘Politicians’ Parliament’ not a ‘People’s Parliament’. It’s something we are going to have to get used to, at least for the next four years. The referendum on the alternative vote will dictate whether we like the new style of coalition Government. Liberal Democrats take heed. How you behave over the coming five years will determine your long-term political future. And let’s hope the right wing Tories toe the line too. A lot is at stake and, as Cameron states, we have a collective responsibility.
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