UK election results: Clegg – deal or no deal?


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 Queen’s speech.

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 the country”.

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.

“I think 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.

The 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.

On 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.

Clegg 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.