Imagine it is the afternoon of May 7…

The Tories have received 33% of the popular vote, LibDems 29% and Labour 24%, a strong 6% showing by the BNP concentrated in Labour heartlands has shocked the political system and given the party its first Westminster MP in Stoke, where Labour’s vote split. UKIP’s Nigel Farage has taken Buckingham, after two recounts, by 7 votes.  Ed Balls has lost his Morley and Outwood seat to the Tory hero of election night, Antony Calvert.  The SNP has made strong gains strengthening Alex Salmond’s claims for Scotland to be granted more self determination.

Due to the iniquities of the electoral system Labour is still the largest party in Westminster, just.  Harriet Harman has demanded Gordon Brown resigns and announced her intention to seek the leadership, Miliband hasn’t been seen. Charlie Whelan publicly tweets blame on Mandelson’s electoral strategy and “corrupt Blairites” for Labour’s defeat.  Alastair Campbell is bailed at West London Magistrates’ Court after his live on-screen 3 a.m. drunken assault on Nick Robinson.

After unofficial back-channel communications between Samantha Cameron and her third-cousin at Buckingham Palace all morning, the Queen’s Private Secretary calls the leader of the Conservative Party and asks him to come to the palace.  The Private Secretary then calls Nick Clegg and asks him to come to the palace as well.

In what is the iconic picture of the election, Cameron walks out of his Millbank headquarters along the Thames embankment to 4 Cowley Street where Nick Clegg greets him and together they walk purposefully towards the Mall surrounded by photographers and cameramen as crowds cheer and many ask “which one is which?”

In what were reportedly good natured discussions all morning the terms of a “Change Coalition” had been agreed by 3 pm.  Clegg as expected is Home Secretary and Deputy Prime Minister, Cable is Chancellor, Osborne takes his old sparring partner’s job at Business. Phil Hammond and David Laws are tasked with cutting spending and reforming taxation at the Treasury.  Lord Adonis remains as the government’s Transport Minister, Frank Field returns to the Department for Work and Pensions, both take the Liberal whip. Chris Huhne, ominously for the coalition, chooses to go to the backbench rather than accept cabinet collective responsibility as Defence Minister.

The most difficult horse-trading over the coalition was of course over Europe and electoral reform. Hague went to the FCO much to the relief of the Tory base and Ed Davey becomes the cabinet’s Minister for Constitutional Reform (Douglas Carswell gets a promotion as his deputy with special responsiblity for localism).   The leaders realised that they could not take their respective parties with them if they compromised on either of these two issues.

The average age of the cabinet is now 44, the centre-piece of the Queen’s speech is to be a Great Repeal Bill, undoing 13 years of authoritarian legislation and strengthening civil liberties, restricting the growth of the surveillance and database society. The Big Society reform programme promises to fundamentally re-balance state and society in favour of a smaller more open government.  Cable promises an emergency budget within 30 days signalling tough action on the deficit.  The gilt market hits a 3 year high and the pound rallies 12% on the close.

Norman Tebbit, who was by her bedside, blogs the sad news that Baroness Thatcher has passed away.  Her last words were “Norman, they buried the Labour Party before me.”

Punters on Politics Smarkets says there is a 56% chance of a hung parliament…