How do we prevent a government ’scorched earth policy’?

Although the result is far from a foregone conclusion, the favourites for victory in the 2010 general election must be the Conservative Party. Given that the current Labour government are as aware of this as everyone else, their planning and decision making can’t fail to be influenced by that knowledge.  As we mentioned in our ‘The recession isn’t ending‘ post, this sort of situation could lead to a ’scorched earth policy’, or similar.

Our current constitution includes no mechanism for penalizing an outgoing government, which acts against the best interests of the nation, rather than act in a way, which might help the incoming administration. Whilst ’scorched earth’, or ‘poisoning the water supply’ policies might be more drastic and easily recognisable, even abdication of responsibility is undesirable. It is conceivable that an incumbent administration might fail to respond to the needs of a nation, rather than allow their soon to be victorious rivals to take the credit.

Unsurprisingly, the possibility of such a scenario has been noted in Tory circles:

• The most dangerous thing in Britain is the nothing-to-lose Labour Party
• The start of scorched-earth policy?

It is unlikely that any weak, outgoing government hasn’t been influenced in this manner to some degree. The question is, how do we modify our constitution to ensure governments actually act in the best interests of the people they represent, regardless of political circumstances? This should be a fundamental tenet of natural politics.

The recession isn’t ending

The government would have us believe the recession is ending, but we don’t see much evidence of it. At this time of year, when many businesses should be shipping more goods than usual, trade and industrial packaging suppliers expect to enjoy their busiest quarter. As a result, the packaging industry is a good barometer of a large cross section of businesses in general. Our direct contacts within the packaging industry inform us that they, their suppliers and competitors are in decline, with many going out of business altogether.

Banks are still paying big bonuses but either not lending, or lending at inflated rates; 6.5% is common, when the base rate is 0.5% currently. SMEs (Small and Medium-sized Enterprises), including what’s left of Britain’s manufacturing and engineering industries are going to the wall due to poor cash flow and an inability to borrow.

So why won’t the present government bring pressure to bear on the banks currently in public ownership? If they were to give business a much needed helping hand, but fail to win next year’s general election, the incoming government might well take the credit. How much does this sort of reasoning feature in the actions of a weak, outgoing government? If it does happen, or ever has happened, it could lead to a highly undesirable form of ’scorched earth policy’. The problem is, how do we prevent such a thing?

Also see “Let the RBS directors resign“.