The potential damage of an inconclusive poll

WITH just two-and-a-half weeks to go until the election and the main two parties still essentially tied, the battle is becoming more bitter. Labour today returns to the issue of the NHS, warning of a “nightmare” vision under a re-elected Conservative government. This is safe ground for Labour: as our poll today on key election issues suggests, it is ahead of the Tories on health by 13 points — and in the lead on welfare, immigration and education too.

But Ed Miliband’s party remains stubbornly behind on managing the economy: the Tories have a clear lead there, by 41 to 23 per cent. This is at the centre of the Tories’ case for re-election. For many in the City, the prospect of a Labour victory is uncomfortable. This week, at its annual meeting in London, HSBC will face renewed pressure from investors to quit London, following the Chancellor’s most recent hike in the bank levy — the kind of move that would be likely to be extended by Labour. More generally, business hates uncertainty, a situation guaranteed by an election as close-run and potentially inconclusive as this one.

Precisely those difficulties in a hung parliament are the other half of the Tories’ case: that a Labour minority government would be in hock to the SNP. That could indeed have a significant impact on key issues such as defence, though it remains unclear how far the SNP’s opposition to Trident would be a red line in any parliamentary co-operation with Labour. What is certain is that any such governing arrangement — or for that matter a Conservative-led government relying on the support of the Lib-Dems and one or more other parties — would be unstable, and probably relatively short-lived. Variations on the current deadlock may end up lasting some time.