Opinion & Commentary
A nation in denial and deeper in debt
For four weeks, Britain witnessed a mock general election campaign in which none of the principal parties was willing to explain what it intended to do to reduce the country's huge deficit.
Fittingly, on Friday, the country woke up to find it had produced a mock result in which none of the parties had sufficient seats to form a government. Just as the politicians refused during the campaign to confront the issue of spending cuts and tax rises, so the voters refused in the polling booths to give any party the power to tackle the crisis the country is facing.
It is as if the entire nation is in denial.
Uniquely, perhaps, this election delivered defeats to all three main parties. Labour lost 91 seats - more than at any time since 1931 - and ended up with just 29 per cent of the vote.
Nevertheless, Prime Minister Gordon Brown stayed in Downing Street , a loser hopeful of making a deal with other losers to hold on to power.
The Conservatives picked up 94 seats and actually won more votes than Tony Blair mustered in 2005.
But they ended up 20 seats short of the majority they needed and expected.
Some in the party are angry Conservative Party Leader David Cameron blew their chance by campaigning on a slogan, "the Big Society", that most voters found somewhat vacuous.
They also think it was a mistake agreeing to debate on television with Nick Clegg, the Liberal Democrat leader.
After the first of these debates, Liberal Democrat support surged and pundits were forecasting Labour would be pushed into third place.
But on the night, it all came to nothing as the Lib Dems actually lost five seats. Of all the party leaders, Clegg must be the most disappointed. Nevertheless, during the weekend he found himself occupying a pivotal position.
One outcome from the political bartering since the vote is some sort of deal between the Conservatives and the Liberal Democrats.
Cameron has offered Clegg a formal alliance with three cabinet posts, but he could go it alone, forming a minority Conservative government with a conditional pledge from the Lib Dems to allow his financial measures through.
The Lib Dems would prefer an alliance with Labour, for they see themselves as a left-of-centre party and few of their supporters could stomach being junior partners in a Tory administration.
As an added incentive, following his deathbed conversion to proportional representation, Brown offered them a change to the voting system which could result in Labour-Liberal Democrat governments for years to come.
It must be tempting for Clegg to grab this, But the maths will not add up. Even adding the Liberal Democrats' 57 seats to Labour's 258 seats you still don't get past the 326 needed for an overall majority. They could rope in minor parties and Britain's first Green MP, but it starts to look grubby and unstable.
In all probability, therefore, Brown will have to leave the office to which he has never been elected and Cameron will move into Downing Street as leader of a minority administration. This will almost certainly trigger another election within 12 months.
In the meantime, what happens to the budget deficit?
The obvious question is whether a weak and unstable British government will look any more convincing in addressing Britain's budget deficit. The portents are not good.
Government spending increased 54 per cent in the Blair-Brown years. Spening on social security payments mushroomed (despite a buoyant economy and low unemployment), and government education and health budgets spiralled.
After 13 years of this profligacy, millions of people in Britain now believe they have an entitlement to government assistance. The election campaign did nothing to disabuse them of this.
The gap between the government's annual income and spending has grown to 12 per cent of gross domestic product, which is financed by borrowing.
Interest charges alone already cost more than the entire defence budget.
The national debt stands at £950 billion ($1582bn), or 68 per cent of GDP.
Add to this about £1 trillion of unfunded public sector pension liabilities, and don't forget the payments that will have to be made to private sector businesses, which invested in all those new schools and hospitals through public-private partnerships (the Private Funding Initiative).
The BBC estimates that, putting all this together, each British household is burdened with an average of £90,000 of government debt.
In Britain, if these were private individuals or business, they would be calling in the receivers.
Everybody knows severe cuts are needed to get on top of this problem. During the election campaign, the governor of the Bank of England was quoted as saying that, whichever party wins, it is going to have to introduce measures so unpopular that it could find itself out of power for a generation.
He is probably right, people still talk bitterly of the Thatcher years, particularly in Scotland, where the Conservatives still find it almost impossible to win a seat. But 20 years have passed since Margaret Thatcher left office and the scale of the cuts needed now far exceed anything she did.
Bearing this in mind, if you were Clegg, would you want to associate your party with a Tory government that is about to embark on the biggest public expenditure reductions since the 1920s?
By the same token, if you were Cameron (or, indeed, Brown), knowing you will need to fight another election in possibly a matter of months, would you set about slashing spending, raising taxes and antagonising the powerful public sector unions in the schools, hospitals and local councils?
And if you were an international bond dealer, looking at the scale of the country's indebtedness and the politicians reluctance to get to grips with it, would you still be putting your cash into Britain?
Cameron is said to want a deal with the Liberal Democrats before the markets open today. But whatever deal the politicians eventually stitch together, this was a disastrous election result for anybody hoping Britain might avoid the Greek road to ruin.
