David Cameron is trying to form the first Tory government since 1997 by offering a deal to the Liberal Democrats, including the possibility of cabinet seats and a cross-party committee of inquiry into electoral reform.
After being thwarted in his bid to secure an overall Commons majority, leaving Britain with its first hung parliament in 36 years, Cameron reached out to Nick Clegg with what he described as a "big, open and comprehensive" offer.
But it left senior Liberal Democrats divided on how to respond, with Gordon Brown
also pitching to secure Clegg's support with a more concrete offer of
reform of the electoral system – one of the Liberal Democrats' most
cherished and totemic policies.
In an extraordinary day of
political horsetrading, held against the background of volatile
markets, Cameron said he was open either to a full coalition with the
Liberal Democrats or a formal agreement whereby a minority Tory
government was guaranteed more than the passage of its budget and the
The carefully crafted proposal was designed to
trump a rival earlier offer made to Clegg by Brown, who made a
statement outside Downing Street in which he insisted he was getting on
with government while the Conservatives
and Lib Dems began negotiating. Brown made clear he would continue as
prime minister until a deal was done. He said it was his
"constitutional duty to seek to resolve the situation for the good of
Cameron then took the initiative after an unexpectedly resilient Labour
campaign left the Conservatives with 307 seats, a net rise of 98, but
17 seats short of an overall majority. Cameron's setback was greeted
with relief by Labour, which finished with 258 MPs, down 91. The Lib
Dems were surprisingly down five seats on 57, with other parties on 28.
The Conservatives got a 36.1% share of the vote (up 3.8%), Labour 29.1%
(down 6.2%) and the Lib Dems 23% (up 1%).
Facing fierce internal
party criticism over his campaign's effectiveness, Cameron had to tread
carefully in making his offer to Clegg in order not to spark a
rebellion among his MPs, who are deeply worried electoral reform would
leave them shut out of government for decades.
He admitted there
were policy disagreements between the Tories and Lib Dems – including
on the EU, immigration, spending cuts this year and defence. But he
insisted there were also "many areas of common ground" such as a "pupil
premium" in schools, a low-carbon economy, tax reform for the low paid
and shared opposition to Labour's ID cards scheme. Crucially, he did
not pledge a referendum on changing the voting system and instead
offered an all-party committee of inquiry on political and electoral
reform. Cameron also insisted he would not compromise on his
Euroscepticism, on his pledge to cut public spending by £6bn this year
and his commitment not to increase national insurance.
we have a strong basis for a strong government. Inevitably the
negotiations we're about to start will involve compromise. That is what
working together in the national interest means," said Cameron.
last Conservative prime minister, Sir John Major, said it might be
acceptable to give the Liberal Democrats some cabinet seats. The point
was echoed by the current shadow foreign secretary and former Tory
leader, William Hague.
Following the offer, Clegg and Cameron
spoke briefly on the phone before a longer meeting attended by the two
leaders' teams, including Clegg's chief of staff, Danny Alexander, the
home affairs spokesman, Chris Huhne, and schools spokesman, David Laws.
Cameron's team was led by his policy chief, Oliver Letwin, Hague and
shadow chancellor, George Osborne.
The Tory leader made his "big
offer" after Clegg publicly invited the talks, saying he was honouring
his election promise to let the party with the largest number of seats
and biggest share of the vote try to form a government first.
the key issue of electoral reform, Lord Oakeshott, the Liberal Democrat
Treasury spokesman, said: "There's no need for an inquiry to expose
that an eighth of the seats for a third of the votes as daylight
robbery of Lib Dem voters."
Clegg's allies believe that Cameron
is desperate for power and may yet give a lot more policy ground if he
is confident Clegg will ensure his party gives the Tories long-term
support in the Commons.
Cabinet members believe Clegg would
struggle to get a deal with the Tories through his own party, largely
since they see themselves in the progressive tradition of politics.
The Lib Dems' federal executive and parliamentary party is due to discuss the proposed deals at meetings tomorrow.
is concerned that any referendum on electoral reform staged by a Brown
premiership might be lost due to political anger at the way the prime
minister had stayed in office after defeat at the election.