London: Britain’s opposition Conservatives were in pole position to take power on Friday after winning the most seats in parliament in a bitterly fought election and securing the tentative backing of the third largest party.
While the centre-right Conservatives failed to gain an overall majority in the 650-seat House of Commons, creating the first “hung parliament” since 1974, they were comfortably ahead of the ruling centre-left Labour party.
Prime Minister Gordon Brown has not given up holding on to power, however, adding to political uncertainty that rattled financial markets already reeling from sharp losses on global stock exchanges and the Greek financial crisis.
Bookmakers saw a better than one-in-three chance of another British election this year, a scenario that would be likely to spook the markets further.
With results in 620 constituencies declared, the Conservatives were on 291 seats, followed by Labour on 251 and the centrist Liberal Democrats on 51.
The lack of an outright winner could bring smaller parties into play. While Lib Dem Leader Nick Clegg was disappointed with his party’s showing, he called on the Conservatives, as the largest party, to try to form the next government.
But he and other senior party officials indicated their support might be conditional on reforming an electoral process that is stacked against smaller parties.
“It seems this morning that it is the Conservative party that has more votes and more seats, though not an absolute majority, and that is why I think it is now for the Conservative party to prove that it is capable of seeking to govern in the national interest,” Clegg told reporters in London.
Cameron was to set out his plans in a statement on Friday afternoon, his party’s statement echoing Clegg’s comments:
“David Cameron will make a statement at 1430 (1330 GMT) at which he will set out how he will seek to form a government that is strong and stable with broad support, that acts in the national interest.”
The prospect of a “hung parliament” rocked already febrile financial markets.
The pound tumbled, Britain’s top share index extended this week’s rout and gilt yields leapt as the inconclusive election outcome unnerved investors jittery about Europe’s mounting debt crisis.
But prices regained some ground after Clegg suggested that the Conservatives held the initiative and the ratings agency Moody’s said the ambiguous election result did not pose a direct threat to Britain’s triple-A sovereign debt rating.
“The net result is masses of uncertainty. The new government is likely to be weak at best,” said Alan Clarke of BNP Paribas.
“Even in the case of a coalition, the partners will be constantly looking over their shoulders, and compromise politics will mean that the scope for delivering radical or unpopular fiscal tightening is limited.”
Clarke said there was now a growing threat of a credit ratings downgrade for Britain, where the deficit is running at more than 11 percent of national output.
“Ahead of the election we saw the risk of downgrade at close to 50%. On the basis of the election outcome as it looks now, a downgrade looks to be the most likely outcome,” he said.
Despite Clegg’s overtures, there was considerable uncertainty over the shape of any future government.
Senior labour minister Peter Mandelson said he did not expect Brown to resign on Friday. He said he was ruling nothing in or out, and he and others in the party appeared to be wooing the Liberal Democrats. “I don’t think it would help matters if he (Brown) were suddenly to step aside,” Mandelson said.
However, Labour, in power since 1997, could struggle to form a coalition with the Lib Dems since their combined forecast seats would still be short of an overall majority.
The Conservatives could also seek a pact with smaller parties, most likely the pro-British Democratic Unionist Party in Northern Ireland, but would also struggle to assemble a majority without Lib Dem support.
Britain does not have the same tradition of coalition building as its neighbours in Europe, and few Britons can remember the last inconclusive election almost four decades ago.
The sense of confusion was heightened by reports that hundreds of voters had been turned away from crowded polling stations across the country when voting ended at 10 p.m.
The Conservatives were forecast to win around 305 seats and Labour 255 in the lower House of Commons. The Lib Dems were a distant third, with an expected 61.
The BBC calculated the Conservatives had taken 36% of the vote, Labour 29% and the Lib Dems 23%.
Notable losses for Labour included former cabinet ministers Charles Clarke and Jacqui Smith. Northern Ireland’s first minister, Peter Robinson, of the Democratic Unionist Party, was the highest-profile casualty of the night. Gainers included the Greens, who won their first ever parliamentary seat.
Independent think-tanks have accused all the parties of failing to be open with voters about the scale of cuts that will be needed to restore public finances, meaning any government could face a rapid plunge in popularity once cuts begin. REUTERS