TEXT OF INTERVIEW
Kai Ryssdal: Five days after the votes were counted, the British election was made final today. Prime Minister Gordon Brown took about 5 minutes outside of Number 10 Downing to announce the results.
GORDON BROWN: I’ve informed the queen’s private secretary that it’s my intention to tender my resignation to the queen. In the event that the queen accepts, I should advise her to invite the leader of the Opposition to seek to form a government.
The Queen did accept Mr. Brown’s resignation. She did invite the leader of the Opposition, David Cameron, to form a government, which he has in a coalition with the Liberal Democrats. And we have called our man in London, Stephen Beard, for more. Hello, Stephen.
STEPHEN BEARD: Hello, Kai.
Ryssdal: What is the first thing Prime Minister Cameron is going to have to do now?
BEARD: Cut the budget deficit. Both parties, both the Conservatives and their Liberal Democrat partners, made it clear over the past few days that repairing Britain’s public finances will be their central concern. And certainly investors think that it should be their main concern. The U.K. has got the worst deficit of the G7 countries. And the European commission says if things go on as they are, the U.K. could have the worst deficit in the EU, worse even than Greece’s by the end of the year.
Ryssdal: Which is obviously saying something. What’s the market reaction going to be tomorrow when the markets open, Stephen?
BEARD: Probably relief. Markets appear to regard this government as the most likely to be able to tackle the budget deficit. It’s been interesting to watch the behavior of the British pound, the currency, during the torturous negotiations between the parties over the past few days. As the likelihood of a conservative-liberal coalition rose, so did the pound. When the prospect of a labour-liberal coalition emerged, the pound fell. So, yes, I would say markets will be relieved tomorrow.
Ryssdal: Labour has been in power now, or was in power I should say, for 13 years over there. How is this remarkable election going to change what happens over there?
BEARD: I think the main thing is the state is going to get smaller. At the moment, government spending in the U.K. accounts for some 50 percent of economic activity. The budget deficit cutting is going to reduce that. But the conservatives anyway are committed to shrinking the state, so a smaller state, bigger private sector. And we do seem likely to be heading into a period of some labor unrest. There are some six million public sector workers bracing themselves for some big cuts. There will be a lot of resistance, and the Labour Party, now becoming the Opposition, as you say, after 13 years, in power; they seem certain to revert to their traditional role of fighting for the working people and for the unions. So I would think we’re heading into a period of some turbulence.
Ryssdal: Marketplace’s Stephen Beard in London for us. Thank you, Stephen.
BEARD: OK, Kai.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.