Inertia Fever
All you need to do these days is to mention the phrase “hung parliament” and you’ll see terror in the eyes of those around you. Run for the hills, sell everything and move country, shut up business and cash out while you can…or you could stop the stupid panicking and listen to the facts. Yes politics has a place in the decision-making process of those running small businesses and the financial Angels who support them, but how much of this fear is warranted?
Over the past few weeks, both online and print media have been ablaze with terrifying claims of the potential affect of a hung parliament on the economy, on business and on the investments of financial Angels. Politicians, figures from the business community and economists have had a great time arguing about the evils of a hung parliament, and the fall in sterling as a result certainly lends itself to supporting the panic. But how much of this is hype to sell papers (surely not), and how much should we consider as valid reason to worry or prepare for?
Before we go into that, it’s probably best to deal with those among you who’ve got that glazed look of confusion in your eyes when I mentioned the phrase “hung parliament”.
A hung parliament is when no one political party has an absolute majority in the House of Commons, simple. Surprisingly, it’s been 36 years since the last time this happened, but the polls suggest that it may be about to happen all over again. But what’s all the fuss about?
Well, political inertia is the problem. The economy is in a delicate state where we could continue to rise from the darkness of recession or fall back into the abyss depending on what happens next. Plans need to be put in place now to help small businesses to flourish and to encourage financial Angels to invest more in their success. However, a hung parliament will mean that these changes may well suffer from delays or even be quashed until such time as the elected Government decide to dissolve and hold another election, delaying things even further. The problem is that without an absolute majority the Government’s plans can be blocked if the other parties joined forces to do so.
We need to be supporting our financial Angels now, because without a credible bank lending system in place, their role in helping small businesses to survive and thrive is all the more important.
So, yes the pound is likely to suffer in the wake of a hung parliament decision, and yes it will probably take longer for any measures that might help small businesses or support financial Angels to come about…hold on, hold on, put the phone down, you can call your accountant later…because in the end it’s in everyone’s interest for us to spring back from the recession. So while the road may have just got a touch rockier and the big decisions may be delayed by political inertia, I’m sure that the shared desire to punch through to more economically positive times will mean that what needs to be done to support our small businesses and financial Angels in their activities will be done. After all, it’s not as though politicians are going to be stupid enough to let their egos and craving for power to get in the way of such logical thought…oh dear…where’s my accountant’s number?
Image © mørland/the times
