“Thank you and goodbye.”
“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.’
The fervent intensity of the negotiations is waning, the LibDems are now merely holding up proceedings. Two clear offers have been made to them and the fact there is still no firm conclusion proves they are stuck in a rut. They need three-quarters of both their parliamentarians and their Federal Executive to give the nod to any deal. Why the delay? Clearly there is a stumbling block toward the approval of the Lib-Con deal, but are there three-quarters in favour of a Labour deal?
A Lib-Lab pact has the backing of old timers like Paddy Ashdown and Vince Cable, who told Nick Robinson today that “he would have stayed in the Labour Party – he once co-wrote a pamphlet with Gordon Brown – if he hadn’t moved to London where the so-called “loony Left” had taken the party over.” However with even prominent Labour MPs speaking out over such a deal, Clegg is in an impossible position. Within his own negotiation team can you really imagine right-winger David Laws being willing to prop up Gordon for another four months or subject the country to yet another un-elected Labour leader? After the vocal outrage for the last three years from the Liberals about unelected leaders and the need for mandates, they would still look ridiculous. But it looks as if the Lib Dems are left with just one option…
The Labour pact is fundamentally weakened, fatally wounded in fact, Mandelson cannot bring the Scottish Labour MPs with him since they refuse to cosy up to the SNP, locked as they are in a bitter war north of the border.
The Tories now believe Clegg to be in a weaker position than he was 24 hours ago, having flirted with Labour, without being able to consummate a deal….
UPDATE : Latest prices – from bookies shows money shifting back on to a Lib-Con coalition, now quoting a 65% probability versus giving a Lib-Lab coalition a 45% chance.
UPDATE II : Clegg met Cameron this morning and Tory negotiations are restarting at 2 p.m. according to a tweet from Hague. Looks like some punters were in the know…