A hung Parliament could be the worst for island
A CONFESSION. Some months ago I put some money on the UK General Election ending in a hung parliament.
A CONFESSION. Some months ago I put some money on the UK General Election ending in a hung parliament.
It would be a good result for me, but perhaps the worst result for Guernsey.
It might be easy to ignore the importance of what happens on Thursday 6 May, turn a blind eye because it is beyond our shores.
But the knock-on effects are numerous.
Who will be representing our interests on the international stage? How aggressive will their policies be towards offshore jurisdictions?
What will happen to inflation? What will be the reaction of the City of London and the financial markets? What will happen to UK tax policy and how attractive will we be in relation to it?
Guernsey is firmly wired in to the UK and its fortunes and misfortunes will resonate here.
Somehow, a Conservative Party that some analysts believe should have a 15-point lead or more has hit a rut.
Maybe it's down to a George Osborne factor – what would they give for the more populist Ken Clarke to be more in the spotlight – or the twinkling of a slow, oh so slow economic recovery?
The incumbent party has a tradition of faring better than expected in the General Election, but there is slim hope this factor will give Gordon Brown's Labour a majority.
The Conservatives are up against some electoral district boundary changes that favour Labour.
And Labour probably has the massive public sector on its side – faced with a choice between them and the deep cuts expected if the Tories take power, people might just be thinking about saving their jobs.
Signs are pointing at a hung Parliament at this early stage – and if that happens the Liberal Democrats come into play, which means one of the most hawkish MPs as far as Guernsey is concerned, Vince Cable, comes into the picture.
Cameron might just have decided not to touch the 50% tax rate in a bid to bind his party with the Lib Dems, however odd bedfellows they make.
If Parliament was hung some suggest there would be another election in a year, all uncertainty that could cause huge damage to the City and reverberate again here.
So what could change this picture?
All the headline-grabbing revelations so far have been shown to have little impact on the polls – whether its money-grabbing outgoing MPs from Labour or Lord Ashcroft's tax arrangements.
Well, it's the economy, stupid. The first quarter GDP figures are published a fortnight before the election.
The extremes could favour the Tories.
A slump and Labour becomes more tainted.
A good recovery, however unlikely, and the electorate might be more willing to give the new guys a chance because people think things are secure.
Whoever persuades voters they will handle the economy better is likely to take the spoils.
Just watch the televised leaders' debates with interest.
Is it easier for the public to grasp Labour's fragile recovery message, one based on holding off on any severe measures.
Or do they want the Conservatives wielding the axe?
People have a tendency to go for the safety-first option and that favours Labour.
They will be reluctant to face up to just how bad the UK public finances are and what the Tories would do to fix that.
With so much uncertainty in the air about what shape the next UK Government will take, Guernsey's external relations team has been dividing its time equally between the main players.
There could be opportunities for the island in the fallout as well as challenges.
The more aggressive the UK gets on domestic tax policy, the more opportunity there could be for genuine tax planning, for example.
Guernsey goes into this period in good shape as far as examination by the UK goes.
The Foot and the Justice Select Committee reports, Guernsey's white listing by the OECD, and signals from the UK all point to greater autonomy for the island and at least some understanding of the way it operates.
