“Thank you and goodbye.”
So the deal is a whipped vote for a referendum which most Tory MPs including Cameron will campaign against and a fair number of cabinet seats. It is rumoured that six cabinet seats are on offer.
Will this cut any mustard with the weirdie beardies? They know this is their best chance for electoral reform ever, they haven’t got a firm offer. If nine lefties on the Federal Executive say “no” it will have to go to the members. Cowley Street insiders say it is the only deal in town now, but LibDems are often awkward types, hence the bookies making it a 96.5% probability tonight, 3.5% short of a done deal. That 3.5% shortfall is the random weirdie beardie risk.
UPDATE : The rumour mill is in overdrive. Full coalition seems to be certain. Reports of Nick Clegg as Deputy Prime Minister with six cabinet positions. Brown could be about to quit his seat Blair style – embarrassing less than a week after an election. Brown to the Palace in the morning at the latest. Cheers.
Looks like there is real movement – Gus O’Donnell has joined the Cabinet Office negotiations. A meeting has just been called for the Liberal Democrat MPs and crucially their Federal Executive tonight at 19.30.
It seems that a Tory/Liberal deal is nearly ready to be put to them.
Just nine members of the Federal Executive could cause a real headache. If they, or fifteen MPs, vote against the deal then this has to drag on until the weekend where Clegg would need the support of a simple majority of members at a Special Conference. Very doable but a long delay.
UPDATE : 25 minutes later Sky and the BBC now reporting the meeting. Lib/Lab talks are over. You read it here first.
UPDATE II : Cars are being packed up on Downing Street. Labour are spinning that the negotiations never got off the ground.
UPDATE III : Standard splash that “Brown Quits as Prime Minister!“
This just sent in by a co-conspirator. Looks like something has got up right up Campbell’s nose…
In a clear bit of positioning, Andy Burnham has just gone public with his criticism of a Liberal Democrat and Labour deal: “I think we have got to respect the results of the general election and we can’t get away from the fact that Labour didn’t win.”
Via Paul Waugh we learn that he was a lot more candid at the Cabinet meeting last night. He apparently “raised concern about the backlash coming from the electorate over this situation… He said it could be perceived as bad for democracy if we are not listening to what the public have very clearly said.” The money is moving on Burnham, he could gain some traction as a unity figure…
UPDATE : French investment bank BNP Paribas Capital Markets advised clients this morning
‘A Lab/Lib government is the least liked option by markets and would almost guarantee a downgrade of the UK sovereign. Moody’s suggested yesterday, when announcing that Greece and Portugal where due for a further downgrade (eventually giving Greece junk bond status), that the UK would not be downgraded while parties hold coalition talks. However, the implicit meaning of this statement suggests that the rating agency will look carefully into budget plans when deciding on the potential downgrade. We believe that a downgrade under a Lab/Lib government is more than likely since both parties agree that early expenditure cuts could harm the economy. The alternative could be that both parties agree on tax hikes to be implemented with the next budget. Both outcomes would be equally bearish for sterling. Hence, GBPUSD remains a sell.’