In a debate on BBC’s Daily Politics show earlier today, Tory Shadow Chancellor George Osborne reiterated the warnings of Shadow Business Secretary Ken Clarke that a hung Parliament leading to a Liberal Democrat/Labour coalition would create such instability in the markets that the UK would need an IMF bailout.
Osborne said: “If markets feel we do not have the confidence to deal with our debts we’ll have to call the IMF in, it’s a statement of fact. The only time we have ever had to call in the IMF was when we had a hung Parliament, when we had a very weak Government. We have to be aware of the consequences of political instability.”
LibDem Shadow Chancellor attacked Osborne’s forecast as “scaremongering of the worst kind” and said a council for financial stability would solve any future economic problems.
He said: “The Tories are losing the election and starting to panic. If we do have a major financial emergency in the future the public will expect all the parties to work together, all of us.”
Chancellor Alistair Darling labelled the Tories warning as “pretty desperate stuff” and said the Conservative tax cut promises would hurt the markets more than a hung Parliament.
He said: “The Tories have made all these promises, you’ve thrown caution to the wind and that’s what destabilises markets. Ken Clarke ought to know better, this is a ridiculous statement to make.”
Osborne retorted by saying Clarke was a “damn sight more successful Chancellor” than Darling.