IMO that is not the only example of Kenneth Clarke’s going a bit doolally. Consider this recent headline in the FT:

“Clarke makes ‘hands off’ vow to business”
http://www.ft.com/cms/s/0/43fea47e-473b-11df-b253-00144feab49a.html

Really? What about these new taxes that the IMF is proposing for the banks and other financial intitutions and the raft of regulatory reforms being proposed on both sides of the Atlantic for financial institutions and markets to reduce the likelihood of another international financial crisis?

Is Clarke seriously suggesting all that should be rejected? C’mon.

“Sterling will wobble. We have seen even minor flickers in the opinion polls causing problems with interest rates in the recent past.”

Perhaps he’s just been around a long time.

I wonder if he’s talking about the 1980s, I’m sure the 1980s Labour party may have spooked the markets when on occasion they were looking successful, perhaps he’s talking a bit of a Longue durée here and making foolish comparisons.

Because at the moment, there doesn’t seem much activity in the markets with respect to the prospect of a hung [1] parliament, so Ken does look a little foolish.

[1] BTW, Has anyone else noticed Lib Dems (predominantly in my experience) trying to call it a balanced parliament?

I’ve seen Ming do it, my local candidate, some Lib Dem blogger who I can’t remember. Was there a memo or something? Are they trying to create a new euphemism?

I’ve never understood the public appeal of Ken Clarke. I quite enjoy his radio broadcasts on popular jazz and I reckon that I’d appreciate his company over a pint. But I wouldn’t want him to run anything. His reputation as a steady hand at the Chancellorship disguised his meddling during previous cabinet positions (blame Ken for the NHS “internal market”), posts that he held for 18 months before the consequences of his actions could become clear.

So his proposition that the IMF or financial markets are worried by non-majority government comes across as a joke. Money lenders don’t like meddlers such as Ken Clarke; better an idiot like George Osborne than a tinkering Ken.

The financial downfall proposition is a rehash of the 1983 Conservative party election campaign, at which the Labour manifesto included some Clause 4 nonsense. Or 1992 with “If Kinnock wins today, will the last person to leave Britain please turn out the lights”. Markets were unaffected however, because the traders reckoned that the Conservatives would win.

At this election, the main three party manifestos accept a consensus; spending and fund raising patterns will change. No manifesto is credible or likeable, but none will move the markets.

“Balanced parliament” is not a new expression and has been used at previous elections when LibDems and others have challenged the system. I dislike the euphemism because I seek genuine majority decisions, not 50.1% versus 49.9%.

“Non-majority government” is an ugly expression, but the entity is probably close to what most of us seek. It would have to be a government where minor partners proposed bills that the major partner opposed. All participants would have to learn that getting into a huffy state will not bring down the government because you will lose on some occasions.

That is where we are heading, whether Dave and Gordon like it.

“Why’s Ken Clarke scaremongering about the economy?”

Because there’s an election on.

Jebus C Giles, I really did think you were adult, you know?

Quite surprised they’re wheeling out Clarke. I suppose they’re hoping he doesn’t start going on about the glories of the EU until after the election eh…

Knowing FA about economics (or near that figure anyway) I watched the debate with interest & IMO Cable came off best, then Darling. Osbourne still looks like a lost schoolboy, v out of place.

Oh and @2 others have said it but “balanced parliament” is the prefered term I believe in countries where they use PR (like Canada, NZ etc). Places that aren’t used to hung/balanced parliaments use “hung”. So presumably when we get PR (it can only be inevitable after this charade of an election) we’ll be seeing it a whole lot more.

@3: ” Or 1992 with ‘If Kinnock wins today, will the last person to leave Britain please turn out the lights’. Markets were unaffected however, because the traders reckoned that the Conservatives would win. ”

The 1992 election was a closer call than that might suggest.

“So what did cost Labour the 1992 election? Worcester [of the MORI pollsters] has no doubt that it was the Sheffield rally, just eight days before polling day. On the eve of the rally, three polls came out, showing a seven-point lead, a six-point lead and a four-point lead for Labour. That day, Labour peaked.”
http://www.newstatesman.com/199812110020

To get a feel of why the rally generated such an adverse public reaction, try this BBC video clip:
http://news.bbc.co.uk/hi/english/static/vote2001/in_depth/election_battles/1992qt_sheffield.stm

FWIW my impression at the time was that the public mood changed in response to the triumphalism of the Sheffield rally. In later press reports of the Labour Party’s post mortem on the election, Dennis Skinner was quoted as saying the rally had been a mistake.

Clarke – genial though he be – is an old crook with a lot to answer for. Never ever trust a Tory is a pretty reliable motto, and you just need to remember that, Giles.

I just wonder if the voters are going to swallow this new Tory blackmail of “vote for us, not because you want to, but because our masters in the City insist that you do”. I do so hope not.

@6: “Osbourne still looks like a lost schoolboy, v out of place.”

Absolutely. Osborne is a history graduate and well out of his depth.

Vince Cable was chief economist at Shell and anyone familiar with ex-Shell corporate policy people will appreciate the sort of tough, professional questioning that Cable would have had to face in the course of his career.

Whatever else, Darling will have had the benefit of briefing by Treasury civil servants, who are famously sharp.

Note, too, the recent reported comments by Sir Alan Budd, chief economic adviser in the Treasury and head of the government economic service 1991-97, on his concerns about the risks of a double-dip recession in the event of early steep cuts in public spending:
http://www.independent.co.uk/news/uk/politics/tories-economist-criticises-partys-plan-for-cuts-1917785.html

Sir Alan has impressive credentials:
http://en.wikipedia.org/wiki/Alan_Budd

Sir Alan was advising Kenneth Clarke when he was Chancellor during the 1990s. Arguably, he deserves at least some of the credit for the improvement in Britain’s economy at that time. But it wasn’t until the final quarter of 1995 that Britain’s standardised (ILO) unemployment rate went below that of France, Germany and Italy.

9. Bob B

‘ Vince Cable was chief economist at Shell and anyone familiar with ex-Shell corporate policy people will appreciate the sort of tough, professional questioning that Cable would have had to face in the course of his career. ‘

He was only there for two years, Bob.

6. Mr S. Pill

‘ Osbourne still looks like a lost schoolboy, v out of place. ‘

It was nice to see the boy George make an appearance. I was starting to think he had left the country.

The Tories have been doing this for months. “Nobody move! Or the economy gets it!”

Giles

When you say “Knows how to cut a deficit, does Ken, and did it with a chuckle” is that you speaking or the people you talk to?

Because Ken Clarke was chancellor from 1994-1997. In that time UK national debt as a proportion of GDP went from 36% to 42%. Not a massive increase but not strictly speaking a cut?

http://tinyurl.com/257u5on

“where they use PR (like Canada”

Canada is one of the very few places which is almost exactly like thye UKs. FPTP for the lower house, appinted for the upper.

“When you say “Knows how to cut a deficit, does Ken, and did it with a chuckle” is that you speaking or the people you talk to?

Because Ken Clarke was chancellor from 1994-1997. In that time UK national debt as a proportion of GDP went from 36% to 42%”

A deficit is how much we borrow this year. The national debt is the total sum that has been borrowed and not paid back in all previous years. It’s entirely possible for the deficit, how much we borrow in any one year, to fall while the ND increases. If this years deficit of £175 billion will fall to £170 billion next year then that condition will have been reached.

““Why’s Ken Clarke scaremongering about the economy?”

Because there’s an election on.

Jebus C Giles, I really did think you were adult, you know?”

Ooooohhhh, now I get it. He should cook up some story about how voting Left leaves you covered in rashes, while he’s at it.

(But agree on deficit vs debt. Why are people so econilliterate about that?)

I agree about the Sheffield rally – made me passionately anti Labour at the age of 19

I saw this article earlier and wondered then why the unjustified remark about being in the euro being a bad call is just thrown in.

If we were in the euro we would be getting all this crap about how we all have to vote lab or con because the foreign exchange markets will punish us if we don’t. We’ve put up with a currency that bobs about all over the place for too long. It’s just a nuisance. We’ve proved again and again, from the time when Wilson waffled about ‘the pound in your pocket’ that devaluing in the face of recession does not work. It’s not working now. It never has. It just means that every forex trader in the world knows that the pound is a one way bet.

It’s a pity about Ken Clarke. He’s the only half sane man the tories have. Except you do wonder what he’s doing there.

FWIW the focus here on Kenneth Clarke has missed another, current and relevant news report which relates also to previous LC threads:

“A series of anxious shadow ministers have warned the Tory leadership in private that David Cameron’s central general election message – devolving power to create a ‘big society’ – is crashing on the doorstep as candidates struggle to explain the idea to voters.

“As Cameron’s circle intensify their preparations for Thursday’s television debate, by issuing pleas at Tory HQ for fresh ideas, shadow ministers have told the leadership that their “big idea” is too vague and needs to be scrapped in favour of practical policies.

“The nervous discussions come as party officials experience a rollercoaster ride in the face of conflicting opinion polls. A ComRes poll for ITV/the Independent gave the Tories, on 35%, a nine-point lead over Labour and the Liberal Democrats on 26%. Other polls indicated that Nick Clegg was still on a roll after his success in last week’s television debate.”
http://www.guardian.co.uk/politics/2010/apr/20/david-cameron-big-society-tories

“Canada is one of the very few places which is almost exactly like thye UKs. FPTP for the lower house, appinted for the upper.”

My mistake, apologies. Should’ve said Germany – I think they have elections to the Bundestag via a form of PR with no great bother about markets etc?

From a British perspective, Germany’s electoral system is complex although West Germans have long since managed to live with it. Try this for an explanation of how it functions:
http://en.wikipedia.org/wiki/Elections_in_Germany

In 1976, the Hansard Society (of Britain) produced a report of its Commission on Electoral Reform, which recommended the West German electoral system for Britain, partly because it ensured that the Bundestag in Germany fully reflected voter party preferences but also and importantly because the system retained single member constituencies so that elected representatives could preserve the supposed unique personal bonds with local electorates.

Personally, I think there’s much to be said on behalf of multimember constituencies: consider the situation in a safe seat of a constituency in Britain where the local MP is just a dumb, party hack.

Anyone here recall the West German economic miracle of the 1950s?
http://en.wikipedia.org/wiki/Wirtschaftswunder

Or the low inflation rate in West Germany since WW2?

I think many people on here are missing the point.

We *DO* have a serious debt problem. The budget deficit is simply enormous, and the national debt will triple between 2008 and 2014. TRIPLE. Interest payments are set to go from about £30bn to £75bn pa in that time. That definately acts as a drag on growth.

We can as a country afford it (given we can print sterling) so the IMF probably won’t have to come in, but that avoids dealing with the serious nature of the situation. We are not going to be able to outgrow this debt trap, so we are going to have to make massive cuts to get on an even keel. The market *is* watching this closely. No-one really trusts Labour to make said cuts, given that they’ve actively hired over 500k civil servants since the crisis began. The public sector has been the *only* area of the economy where jobs have been created, thus keeping unemployment figures down, but this is not sustainable with 12% budget deficits. We are in the beginnings of a debt trap.

Then there is the second order effect; if Gilt yields rise, so will mortgage rates. There are £1.3tr of outstanding mortgages at the moment, of which a significant percentage need to be rolled or reset in the next 2 years. If rates do go higher on the back of the government’s inability to control spending, the taxpayer will be hit by a double whammy. Higher taxes AND higher mortgage bills. That will defiantely hit the economy hard, and taxpayers can’t print money…they can only default.

Government spending and debt is a massive problem, and it would be foolish to ignore it.

((as an example. firing 1m public sector workers would only save the government between £30-45bn. The DEFICIT is £165bn. Thats before we start paying down the debt accumuated in the last few years.))

@14

Fair point Tim. My bad.

But given that Ken still increased the Total national debt, why does he get away with claiming to be such a financial genius?

Yessirree, Bob @17 !
Cameron is a self-important would-be tyrant: he wants absolute, albeit only for five years, power! He wants to maintain the zig-zag left-right counter-productive politics of the last hundred years and more.
The system as it is almost guarantees power for the Tories for half of the time; whether or not they have ANY policies of worth.
Of course ToryBoy’s frightened of changing the electoral system. With any type of proportional representation, his type of despot would never again be in power!
Just imagine: no more Thatcher’s Poll Tax; no more Major blunders; no more Blair’s Iraqi invasions; no more unelected Browns. How would we manage?

Cameron’s emotive rhetoric in conclusion of the Leaders’ debate, was devoid of policy that offers any real change. The tories believe they have a God-given right to absolute power: all they have to do is sound and look smooth. Thatcher promised reform of MPs pay and expenses; and she made the system more abusable. Blair promised the same; and indeed left it just the same.

Economically, the Tories’ would-be chancellor has been helped by the dinosauric Ken Clarke: who is so in touch with the modern world, he has not noticed the LibDems are close to matching the Cons in the polls.
In fact he thinks the third party is still the Liberals of yore!
Apparently Clarke advised Cameron (and his innumerate side-kick, whose name escapes me,) to oppose the bail-out of any failing UK bank in September 2008.
That was while Vince Cable repeatedly said,”We have to nationalise now!”; and Brown dithered for days on end.
Heaven help us if the gormless Tory shadow gets into Number 11.

I am still waiting for the final swing in the polls: when people realise that the LibDems might well win outright!
That could save Cameron having to talk politics with anyone who will not do as he says, and toe his party line!
Let the Fair begin!