UK general election 2010: a hung parliament?

So, the general election has finally been called for 6 May. Recent opinion polls increasingly indicate that no party will gain the 326 seats required to win an overall majority in Parliament after May's general election.
 
The Conservatives are still predicted to get the largest number of MPs, but have been losing ground steadily since the beginning of the year, on key issues including the economy and their ability to lead the country out of the financial crisis. This is making an outright Conservative victory - which would require the second biggest swing in 60 years - look increasingly unlikely. The result may well be the UK's first post-election hung-Parliament since 1974.
 
Although hung parliaments are normal in countries with different electoral systems - such as Germany - and rarely prove to be a disaster or to have problems tackling large problems, hung parliaments are not common in the UK, largely due to the 'first past the post' system.
 
The most likely outcome is a minority Conservative administration with the government having to work with other parties such as the Liberal Democrats. In this case, the likelihood is that a second general election would follow hot on the heels - within a year - of the first, in order to secure an outright majority.
 
So what would be impact be for on the country and on making legislation?
 

• The key point is that the government is not able to pass laws without the support of members of other parties and that such a regime is fraught and short-termist. This is why there is a perception in the UK that hung parliaments are weak and ineffectual.
• Concerns have been raised in the City, and by some commentators, that a hung parliament would result in a lack of clarity on financial policy, including how to deal with the country's deficit, ultimately damaging the economic recovery and leading some to warn that a hung parliament would be 'catastrophic' for the country.
• There are suggestions that a hung parliament would lead to market uncertainty, which could damage the pound. Standard & Poor's, Moody's and Fitch - the big three rating agencies - have all said that a hung parliament could damage the UK's AAA rating, leading to a UK debt-rating downgrade.
• The sense of stasis can be made worse by the likelihood of a further election within a very short time in order to secure a majority. This means that big decisions are postponed, that politicians are distracted and focused only on the short-term domestic agenda, policy announcements are seen as little more than manifesto pledges, little is achieved and that the country feels like it is in a permanent pre-election period.
• There would also be consequences for the political parties themselves. If the Conservatives do not win this election against an unpopular government and an even more unpopular prime minister, there may be some serious soul-searching as to why. And if Labour do not win, as seems likely, the party is likely to turn on Gordon Brown.

Although a hung parliament returns a government that is far more representative of what the country actually looks like and although there are good points around encouraging consensus in policy-making, there has been little promotion of any positive issues relating to a possible hung parliament.
 
In spite of the polls, there is probably some truth in the notion that the British electorate is fundamentally sceptical of a hung parliament and may give a last-minute nudge to the likely winner.