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Hearing Paddy Ashdown press for a Lib-Lab minority coalition, supported by the Scottish Nationalists, Plaid Cymru and an assortment of Northern Irish parties, on Radio 4 this morning, I couldn’t quite believe my ears. It’s not that I’m surprised Paddy would rather crawl into bed with Labour than the Conservatives – that much is obvious. What astounds me is that he – and presumably others in his party – believe such an arrangement would be acceptable, legitimate, or workable.

Quite frankly, a Lib-Lab pact of this sort would be the greatest stitch-up in our political history. It amounts to two parties who are widely perceived to have ‘lost’ the general election bribing Celtic MPs with promises not to cut their public spending, so that they can rig the electoral system without putting the changes to a referendum (a direct contradiction of Labour’s election manifesto, but then, they’ve got form). Oh yes, and the deal would mean the next prime minister would not be chosen by the British public, but by the Labour Party – and in particular, by the trades unions that have one-third of the leadership votes.

It is extremely unlikely that such a government would be able (or even willing) to take the measures we need to bring public spending under control, and start tackling our deficit and debt issues. People I’ve spoken to in the City expect the markets to make their feelings known pretty quickly if this does come to pass: expect gilt yields to rocket, making it much harder to finance the deficit, and the pound to tank, sparking inflation. It really isn’t difficult to see a Greek scenario coming down the line if businesses lose confidence in UK plc, and people start to panic.