Britain is left without a new leader, as David Cameron scrambles to form government

A power-sharing deal between Cameron and Nicholas Clegg of the Liberal Democrats ended 13 years of Labor Party rule and resulted in Britain's first coalition government since the 1940s.
By Anthony Faiola and Dan Balz
Washington Post Foreign Service
Saturday, May 8, 2010

LONDON -- Britain headed into the weekend Friday without a new leader, as the Conservative Party's David Cameron scrambled to fashion a working government after voters produced this nation's most divided Parliament in decades.

Final results from Thursday's election showed Prime Minister Gordon Brown's Labor Party suffering its worst defeat in 80 years, but Conservative gains fell short of a clear majority, setting up a hung Parliament after 13 years of Labor rule. Cameron and Brown were openly courting coalition deals with Nicholas Clegg, of the third-place Liberal Democrats, in rival bids for power. In a blow to Brown, Clegg signaled his intention to negotiate with the Conservatives first.

The pressure to act fast is becoming intense. The debt emergency in Greece has ignited fears of a new stage in the global financial crisis, and the political stalemate in heavily indebted Britain is heightening concerns that the country could become the next target of investor panic. On Friday, the pound hit a one-year low against the dollar, dropping even against the battered euro. A key stock index tied to Britain's domestic economy shed more than 4 percent, and British bonds came under fresh pressure. Broader financial turmoil could wash ashore next week if the political impasse persists, as some now predict it will, for days.

The most likely of several potential scenarios facing Britain still involves a return to power for the Conservatives -- though perhaps temporarily, or with the party in its first coalition since Winston Churchill's national war cabinet.

Cameron, citing Britain's economic security, offered a power-sharing deal Friday to the man who had turned the British race upside down: Clegg.

Though the predicted surge of Clegg's Liberal Democrats did not materialize -- they actually lost five seats Thursday -- Britain's third party nevertheless emerged holding the balance of power. Cameron, spoke with Clegg by phone Friday, and they agreed to continue discussions. The two sides met late Friday night for inconclusive initial talks, but it remained unclear whether there was enough common ground for the parties to reach agreement.

Cameron insisted they should try, focusing particularly on the goal of slashing a budget deficit that now rivals Greece's. "The national interest is clear -- the world is looking to Britain for decisive action," he said at a news conference, echoing Brown's calls for speed to avoid a market panic. "The new government must grip this deficit and prevent the economic catastrophe that would result by putting off the difficult and the urgent action that needs to be taken."

An offer to Clegg

The Conservative leader outlined the "big, open and comprehensive" offer he had made, saying he would not bend to the Liberal Democrats' proposals to rethink Britain's nuclear deterrent, grant a partial amnesty to illegal immigrants or pursue deeper integration with the European Union. But he acknowledged that the two parties shared some ideas, including on the economy and education. Perhaps most importantly for the Liberal Democrats, Cameron left the door open on electoral reform.

The Liberal Democrats see redrawing the election system as key to their hopes to break the two-party dominance of Labor and Conservatives. But Cameron will face pressure from within his party to avoid giving too much on that issue, with full-blown reform potentially preventing a majority Conservative government from ever winning power again. Some Conservatives suggested the party would be willing to sweeten the deal in other ways, such as offering cabinet posts.

"The important thing is to tackle the problems we have with the economy. They are very serious," John Major, the last Conservative prime minister and a party elder, told the BBC on Friday. Major, who lost to Tony Blair in 1997, added, "If the price for that is one or two liberals in the cabinet, it's a price in the national interest that I personally would be prepared to bear."

Clegg has left open the possibility of a deal, saying he would negotiate first with the Conservatives, given their strong showing at the polls. Nevertheless, an official coalition appeared less likely than a loose understanding between the two parties, with the Liberal Democrats agreeing not to oppose the Conservatives on key votes, in return for assurances on certain issues. The Conservatives could fortify such a deal by striking similar agreements with regional parties in Northern Ireland, and perhaps Scotland and Wales.

Cameron signaled that if he cannot strike a deal, he intends to forge ahead with a minority government. Though common elsewhere in Europe, however, such governments have proved vulnerable in Britain. The most recent minority government here -- in 1974 -- lasted a grand total of eight months.

"In our adversarial, tribal political system, it would be surprising if a minority Cameron government lasted more than one year, maybe 18 months," said Tony Travers, professor of politics at the London School of Economics.

Brown in the wings

Meanwhile, Brown -- who as the incumbent prime minister has the right to try to form a government first -- was not giving up Friday. Acknowledging, in effect, the magnitude of his party's defeat, he said that he would allow the Conservatives and Liberal Democrats to seek a workable solution first, but that if they failed, he would seek his own deal with Clegg. Labor Party officials were reportedly already approaching the Liberal Democrat leader Friday night.

"What we have seen are no ordinary election results," Brown told reporters. "People have been talking for sometime, inside and outside government, about the possibility of a hung Parliament. That possibility has now become very real and pressing. The question for all the political parties now is whether a parliamentary majority can be established that seems to reflect what you, the British people, have just told us."

Final results for the 650-seat House of Commons showed the Conservatives winning 306 seats, a gain of 97; Labor winning 258, a loss of 91; and the Liberal Democrats taking 57, a loss of five. Smaller, mostly regional parties won the rest.

One of the biggest shocks of the elections remained the breakdown by the Liberal Democrats. Clegg's performance in the first televised debate had produced a surge of support for his party, and in the weeks that followed, he had seemed the most energized of the candidates.

On Friday, Clegg could not hide his disappointment. "Many, many people during the election campaign were excited about the prospect of doing something different," he said. "But it seems that when they came to vote, many of them in the end decided to stick with what they knew best. And at a time of great economic uncertainty, I totally understand those feelings."

© 2010 The Washington Post Company