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Hung parliament spells uncertainty for dealers

Now what? That’s the question everyone is asking today as the election results reveal a hung parliament.

All three of the main parties suffered a bruised eye and a bloodied nose. Labour lost its majority and, with it, its clear mandate to govern. The Conservatives, while they won the most seats, failed to get a majority, which left the party without a clear mandate to take office.

The Liberal Democrats had a disaster. Despite opinion polls putting them in second place prior to the Election on around 28%, they will end on fewer seats than last time, with just a 1% improvement in their share of the vote at 23%. They stay firmly in third place on both counts.

Both the Labour and Lib Dem leaders spoke of taking stock and deciding what would be best for the country. A coalition looks likely if the two parties can agree on key policies. One of those is proportion representation, or PR.

Pundits reckon 2010 will be the last time we have a ‘first past the post’ style of voting. Even Neil Kinnock, the former Labour leader, conceded today that some form of PR, where the government is decided by the most votes, was now very likely.
Labour has around 12 days to determine whether it can find a way to retain its governance.

If it’s a Labour-Lib Dem coalition, expect another Election within a couple of years, but this time based on PR.

If the Conservatives link up with one of the minority parties, expect an election within 18 months as it seeks to win the majority needed to follow its manifesto pledges.

Either way, the next few weeks and months spell uncertainty for dealers at a time when strong Government is needed to tackle the national debt and ensure the country continues along the road to recovery.

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