With David Cameron taking up his position as Britain’s youngest prime minister for 200 years, he faces a tough challenge with his coalition with the Lib Dems. We are waiting to hear the government’s new policies, but in the meantime I thought it prudent to look at the possible effect that the hung parliament will have on the already fragile state of the market place.
As an entrepreneur and owner of a business, I followed the recent election closely as the pre-election campaign pointed to a high possibility of a hung parliament. Not only will a party collaboration have an effect on business but a hung parliament in general will have an effect on the pound and the market.
One of the main issues with the hung Parliament is that the market will fear uncertainty. Experience at both home, and more recently in Europe (especially Germany), tells me that a coalition government can be a weak government, and will face obstacles at a time when we need to force through measures to reduce the UK’s high borrowing levels.
A hung parliament will lead to extra layers of bureaucracy while the power sharing parties’ debate over decisions, my fear is that the country will basically be put on hold for 12 months and nothing will get done. We are supposedly in a period of growth but so many businesses are still feeling the effects of the recession. If we stop to consider the current state that we are in – GDP rising at a slow rate, unemployment continuing to increase and over 160,000 companies in dire straits in the first quarter of this year, we cannot afford indecision.
As many businesses continue to feel the effect of the recession, tough choices have to be made on government spending, taxation and foreign policy. We therefore need a strong government to address the urgent issues at hand, and take the economy out of recession, and with the potential of opposing views and differences of opinions, my fear is a hung Parliament will delay progress.