Economic crisis may force 'national Government', MP warns

The scale of the economic crisis may force the main political parties to come together in a "national government" for the first time since the Second World War, a prominent backbench MP said today.

The trigger for such a dramatic move would be a refusal by the bond market to finance state borrowing by buying Government debt, said Labour former minister Frank Field.

The Birkenhead MP warned that the Government's attempt to beat the downturn by cutting tax and bringing forward spending means soaring national debt, funded by the sale of gilts - due to total £146.4 billion this year and similar levels until 2012-13, compared with an average of around £20 billion for the past decade.

Rising unemployment could add to the pressure, forcing benefit spending up as tax receipts fall, leading to a crisis in market confidence in the UK state.

"What would we do if the bond market refused to buy huge chunks of Government debt, or only at a ransom price?" asked Mr Field in an article in The Guardian.

"If the debt can't be sold, it will be impossible for the Government to continue.

"The only options will be to print money, with all the dangers for a country of going along with such a policy; or for the political parties to come together in a national government to try to convince the gilt market that the country is serious about bringing under control the gap between projected Government expenditure and its falling tax revenue base."

Mr Field warned that the failure of the Government due to its inability to finance borrowing could come "unexpectedly" and urged political leaders to start planning for the scenario immediately.